We recently published a white paper entitled Navigating Insurance Policies: What Carshare Companies Need to Know When Buying Insurance Policies for the First Time. This white paper provides a guideline for new carsharing companies to use when making the key decision of insurance. Download the full white paper for free here.
Insurance for Carsharing Companies
Why is insurance such a big decision for budding carshare companies? Insurance is the basis of protection for not just the company, but the members as well as the public, ensuring that adequate coverage makes up for the possible risks involved.
Types of Insurance Policies
Since the process of securing the correct insurance can be lengthy, we recommend that new carshare companies begin the insurance onboard process at least 6 months prior to launch, but ideally 12 months.
The types of insurance policies available to carsharing companies includes:
- Third party (property) damage liability: coverage on damages to another vehicle involved in a collision
- Collision insurance: covers damages to your vehicle when a member collides with another vehicle
- Comprehensive insurance: covers damage to your vehicles that occurs from theft or vandalism
- Umbrella coverage: extra, optional liability insurance coverage
One of the most important factors that determines this decision is cost. A 2016 study by Susan Shaheen, Diwen Shen and Elliot Martin found that insurance costs account for 20-48% of total operating costs, which equates to an annual cost of $780/insured vehicle for car share operators in the US.
Eligibility Criteria and Insurance Costs
Looking to keep insurance costs down while still providing adequate insurance coverage is paramount for new car share companies, and eligibility criteria is a critical factor here. For example, you may wish to have your members provide a driving record, meet minimum age requirements, and verify their Driver’s License and ID to be eligible to become a member of your carshare program. All of these factors will influence your insurance policy price.
What to look for in an insurance broker
As a new car share company, it can be difficult to know whether you are dealing with the right insurance broker. Here are some signifying factors that you’re in the right place:
- Innovative in creating insurance solutions
- Provides seamless insurance solutions across geographical boundaries
- Ability to secure broad coverage to protect assets of your company
- Access to Information Technology for robust claims management
- Access to risk management tools to support rapid growth
The full white paper provides more in-depth details to help you, as a budding or existing carsharing company, become knowledgeable and make the right decisions regarding your insurance policies. Download our white paper here.