PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

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What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

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What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

GET A QUOTE

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

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What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

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What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

GET A QUOTE

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

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What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

PERIOD X™ Fleet Management Software with Insurance Built In

Period X™ Quote

What is Period X™ insurance and how does it work to help you manage your fleet?

American Business Insurance Services, Inc. developed Period X™ for fleet owners or individuals that are renting their cars out on a car sharing platform. This applies to platforms such as Turo, HyreCar or GetAround.  This coverage comes with fleet management software through a web-based dashboard at no extra cost to your policy. This fleet management software comes with tools to ensure your fleet is running at maximum efficiency. When managing your fleet that operates through a Transportation Network Company, the coverage is usually provided to the renter through TNC Provider Insurance. It is important for fleet operators to know that insurance is not supplied through TNC Provider Insurance when the car is not rented out. Of course you want to make sure your car is covered at all times. That’s where our proprietary Period X™ insurance coverage comes into play.

 

 

What a Period X™ Insurance Policy Provides

Our Period X™ Insurance policy provides more than the minimum state limits in
almost all 50 states. A comprehensive insurance product to cover fleets that
are being rented out on Peer to Peer (P2P) rental platforms such as the ones mentioned above. Our product is one of a kind. If you are renting your vehicles out on P2P rental platforms PERSONAL INSURANCE DOES NOT COVER YOU for this type of business model.

fleet management

An insurance policy with fleet management software

We didn’t stop at just putting the Period X™ insurance product together, we did a lot more.  Every Period X™ policy holder receives a proprietary device for each vehicle that they insure. This includes a fleet management web-based dashboard to manage your fleet.  It would be one thing just to have proper coverage that nobody can offer, but below are some of the additional services we provide as part of this coverage:

  • Ability to add/delete vehicles online

  • GPS track each and every car at all times

  • Check billing

  • Access ID cards and so much more fleet management tools

Period X™ is fleet tracking with the insurance built in!

Why we created Period X™ with fleet management software

As usual, the best place to start is always the beginning. To make a long story much shorter, in the beginning there were taxicabs. When taxicabs were the only animal of their kind roaming the earth, life was simple and there was only one period of time. Things were pretty easy. If you needed insurance for a taxicab, you got a taxicab insurance policy that covered that taxi company 24 hours a day, end of story. fleet management software

Then, not too long ago, something called Uber and Lyft came onto the scene.  All of the sudden, things got complicated really fast in the insurance world.  These companies found that if they divided their insurance policy into separate periods of time, and that each period had a coverage limit assigned to it. This made it possible to reduce their exposure (and their insurance premiums) to maximize profits.

Then, we had another new company (HyreCar) facilitating TNC rentals between rideshare drivers that needed cars and vehicle owners who wanted to make money by providing those cars.  The term peer-to-peer rentals was coined.  

A New Problem Arises

Initially, the idea was that personal insurance would cover the party that was renting their vehicle out to the TNC drivers as long as they only had one or two cars. It did not take long for vehicle owners to see that they were netting $700+ a month per car. Seeing such great results, this resulted in the vehicle owners adding more and more cars until they had fleets. Vehicle owners now had 10, 20, or even 30+ cars, which is not covered by personal auto insurance. This issue lead to the need for the Period X™ product to be created since personal insurance doesn’t cover fleets that are primarily used to make money via rental app platforms and especially not TNC rentals.

Napkin math ensued and a new problem emerged: 

“How do I place insurance on my fleet of cars under an LLC or Corp and keep my personal lines insurance pricing?”  

The answer to that question is: Period X™ Insurance!  Our agency was the brains behind this exciting new insurance product. We are now positioned to bring it to the masses! Now, fleet owners who place their inventory on platforms such as; HyreCar, Turo, GetAround & similar peer-to-peer rental platforms have access to a reasonably priced app-based insuranceinsurance product that covers their fleet for only the period of time when the vehicle is not rented out and is being serviced and maintained to ready the car for the next rental.  

There are articles upon articles online in regards to Periods 1,2 & 3 and why they are the way they are. The basic idea is that when a rideshare driver has the rideshare app off, then the rideshare company has no involvement in what that driver does with their car. This results in no insurance for that period of time.  The instant the rideshare app is on and the driver is engaged with it, Period 1, 2 & 3 begins and typically state minimum auto liability limits apply.

fleet management software

 

Breaking down insurance policies divided into separate periods of time:

After the app is turned on and driver is engaged with Period 1, they scan for rides
they’d like to take. The instant the driver accepts a ride, they have entered Period 2. The insurance coverage offered by the rideshare providers increases a bit more to cover incidents that might occur while the driver is on their way to pick up a passenger.

insurance policy

The last (for now) action involved in a typical rideshare exchange is that the driver arrives at the pick-up destination. The instant the passenger(s) get into the driver’s car, Period 3 is activated. 

TNC insurance policy

Period 3 typically involves $1,000,000 of auto liability coverage via the rideshare company insurance policy. This is the riskiest period of time, because any accident occurring during that period fully engages the rideshare provider and all participants involved with that ride.

Period Policies for Commercial Auto Working Together

The “Period 1,2 & 3” policy setup is now the industry standard for app-based transportation companies that offer rides as a service. Now with American Business Insurance Services, Inc. Period X™ insurance coverage, fleet managers are able to go beyond the industry standard. With our Period X™, coverage never slips through the cracks making sure your TNC fleet is protected at all times.

After Uber & Lyft had been around for a couple of years, opportunity-minded people started to notice the great deal of demand for vehicles from drivers who wanted to make money driving for TNC companies, but did not have the means to purchase, lease or finance a vehicle for various reasons.

A few select companies have established a niche in this territory and filled this demand successfully.  These companies didn’t only see this driver need for vehicle inventory in the marketplace. They saw plenty of regular people out there that are not always driving their personal vehicles, or who were interested in purchasing vehicles for the sole reason of renting them out to TNC drivers who needed them. This is an industry that expected to have rapid growth. When creating a TNC company having the proper policy coverage protects your business and livelihood. 

Contact Us For Full Details on Period X™ and our Fleet Tracking Software

We’d love to tell you everything about this program because we’re SO excited about this new product. We can’t just give away all our secrets at once, can we? What we can tell you is that we’re open in most U.S. states, have a full-time I.T. department dedicated to continuously evolving the technology behind this product. Our experienced team of licensed professionals are excited to talk to you about how you can get Period X™ Insurance on your fleet. Give us a call today! Let’s solve your fleet insurance / management problems so you can get back out there and make some money!

Call Today: (800) 980-1950

https://abiweb.com/

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TNC Insurance: Insure your Transportation Network Company in California

REQUEST A TNC INSURANCE QUOTE TODAY

What is a Transportation Network Company?

Transportation network companies, TNC for short, are companies that fall under the umbrella of ridesharing. Uber, Lyft and DoorDash are the obvious examples of extremely successful TNCs. Any company that hires people as individual contractors and employs a shared-economy type business model can be considered a Transportation Network Company. A Transportation Network Company is required to have TNC insurance.

Since the early 2010s, the TNC industry has taken off at a rapid pace especially in California’s large urban cities. The impact of Transportation Network Companies in cities has resulted in a decline in public transportation in recent years. San Francisco has become ground zero for a lot of the giants that dominate the ridesharing industry such as Uber and Lyft. The next big Transportation Network Company in California could be your business, but first insurance!

TNC insurance

If you’re reading this, you’re probably looking for the necessary information to grow or get your TNC off the ground. One of the most important steps required for your business venture is to make sure your drivers and passengers are protected with TNC insurance. Keep reading to find out how to make sure your Transportation Network Company is properly insured and protected.

Where to start with TNC insurance

Being in the TNC industry, it may be difficult to find the proper broker that is able to provide TNC insurance. Most everyday insurance companies are most likely not willing to insure a rideshare company due to the high-risk nature of the industry. Insurance companies that write specific policies for TNC insurance are generally specialized brokers who focus on this unique marketplace.

TNC insurance

Luckily for you, here at American Business Insurance Services, we have a direct line to brokers that provide TNC insurance. With 35 years of experience insuring a wide variety of corporate auto fleets, we know exactly what these insurers are looking for in order to get you the best policy.

Questions you may have while looking for TNC insurance:

  • Why you need TNC insurance
  • Types of TNC insurance
  • How to prepare for a quote

Why you need TNC insurance

While researching insurance options for your Transportation Network Company you will quickly realize personal auto insurance doesn’t cover commercial use. However, commercial insurance doesn’t cover independent TNC drivers, even while driving for the company. Therefore, you need TNC insurance for your company to ensure your passengers and drivers are covered incase of an incident.

The National Association of Insurance Commissioners, NAIC, have identified three specific periods TNC drivers are not covered by their personal auto insurance.

  • First period: when drivers have signed into the application but have not yet been matched with a customer.
  • Second period: when drivers are on their way to pick up the customer.
  • Third period: when the driver has picked up the customer and is taking them to their destination.

Types of TNC insurance

In addition, there are two different types of TNC insurance coverage. The first being auto liability insurance for your Transportation Network Company. Auto liability insurance is required by law and protects you as well as your business when you’re at fault in an automobile accident.

Depending upon the coverage, most auto liability insurance covers your company from financial losses surrounding vehicle damage and medical bills of the passengers involved. In other words, auto liability insurance will pay for the damage to other people and their property for which you’re responsible. Furthermore, auto liability insurance usually covers the second and third periods of TNC driving listed in the bullets above.

As for the other type of TNC insurance, there is physical damage insurance. The purpose of physical damage insurance is to protect shared company vehicles from damages. Whether the driver was at fault or not.

To elaborate, physical damage insurance can cover damage caused to your vehicle that is out of your control. For example, vandalism, theft, fire, accidents involving animals, acts of nature, etc. Physical damage insurance also covers at-fault damage caused to the vehicle. However at-fault damage is usually only covered when said damage is caused by the scheduled driver.

TNC insurance

If you want to read more extensively about TNC insurance coverage provided by American Business Insurance Services, Inc. click here

How to prepare for a TNC Insurance quote

If you’re looking to establish your TNC as the next Uber or Lyft, there is a lot of preparations to be made before doing so. Insurers need to do an in-depth analysis of your company before being able to provide you with a quote for TNC insurance. Therefore, in the interest of time, it’s best to have made these preparations before contacting the insurer.

TNC insurance

1. Build the app

One of the first things you want to do is make sure your app is properly constructed and optimized for collecting favorable data points. For example, average speed. If you can prove that, on average, your drivers drive below the speed limit, you’re more likely to get a lower quote than if they tended to speed.

Furthermore, insurance companies want to be able to know things such as: when a trip starts and stops, number of miles per trip and duration of each trip. Therefore, it’s beneficial to both you and your insurer if you have built and optimized the app before contacting for a TNC insurance quote.

2. Business plan and projections

For the most part, this is all relatively simple information you may or may not have already put together when looking for investors. This should include things such as your plans for company growth. How you plan on monitoring and enforcing safety/loss control. And Finally, a set plan on how your company plans on making a ROI.

3. Safety and Training

Due to the nature of their business, insurers are going to care a great deal about safety. They are going to want to see that you have the proper rules, regulations and restrictions in place in order for your company to operate as safely as possible. They’re also going to want to know how often you plan on/provide training to your drivers for a variety of different things.

Insurers are going to want to know a lot about your hiring practices. How old are the youngest drivers you’d be willing to hire? How often do you have them background checked? These are all important questions that will need to be answered in order to get the best TNC insurance quote.

4. Financial balance sheet

Insurers are interested in this information because they want to see two things. First they want to see that you will be able to pay for, and continue paying for, the policy they provide you with. Second they want to see that your company will have the ability to stay afloat until you start turning a profit. The latter is mostly due to the fact that many TNCs don’t start turning a profit in their first year of operation.

5. Other information

Finally, insurers want to see information that will lend further credibility to your name. One thing that will help you accomplish this is information on your investors. Not only do insurers want to get to know your TNC, but they also want to get to know the source of the money behind the TNC. Writing bios on company executives and investors is a good way to allow an insurer to get to know your TNC more thoroughly.

Another thing that helps in regard to the lending of credibility to your name is a summary of your terms of service and privacy conditions. This is where you want to show the insurer that you have policies in place to protect your customer.

Guidance for finding TNC Insurance from American Business Insurance Services

While this may seem like a lot of information to gather for an insurance quote. Insurers need to see this information in order to make sure they are able to match you with the best TNC insurance provider and get you the best policy. Furthermore, insurers are looking for long term, mutually beneficial relationships. Supplying them with this information is an excellent way to build a positive and long standing relationship with your TNC Insurance provider.

Here at American Business Insurance Services, we understand the process of launching a TNC. We understand that it takes a lot of time and effort. And we understand the industry. We can be there for you every step of the way to help make sure that you understand too.

If you have questions or are seeking further guidance, please don’t hesitate to contact us via phone or email. We would love to help you get your TNC off the ground and paired with an insurer that’s right for you.