I just found out today that at least one of the big 3 doesn’t carry any coverage. Drivers are required to have their own insurance which covers commercial use.
Um…I don’t think any of them do, that I’ve talked to. I know State Farm, Allstate, USAA, AAA don’t.
Unless I missed something in my discussions with them.
Do any of the big 3 carry hired not owned?
What a huge risk…I wonder if most people know about this, and if most insurance companies know it. Now, it scares the bejeebers out of me.
The insurance situation is the dirty little secret of the pizza delivery business.
Yes, the big three are aware of it and that is why they all require francisees to carry hired and non-owned coverage. About 8-10 years ago H&NO rates just about tripled. Back then I asked our broker why and the answer was that they now assumed that there was no coverage on drivers cars and that they were on the hook for whatever occured.
When those rates jumped I called around all the other businesses in my town that delivered and asked what they were doing for coverage looking for more reasonable rates. What I discovered was that ALL of them were flying naked relying on the drivers to have coverage or even worse trying to say drivers are contractors rather than employees thinking that both forms of nonsense were protecting them somehow.
What is amazing to me is that the states have not stepped in with some regulation on insuring commercial use of private vehicles.
The specific situation I found out about is a corporate store. I was told that the training program specifically says they do not provide any coverage. Wow. All those kids running around with no insurance.
Of course they do, because some insurance companies like Farmer’s and Progressive specifically exclude coverage when using a vehicle for food delivery. My non-owned policy specifically requires that drivers provide proof of insurance with a company that does not exclude commercial use.
That doesn’t mean they don’t have non-owned coverage, it just means that they want to be sure the employee has insurance which will cover that employee in the event of an accident. Non owned is there to protect the employer’s passive liability, not to replace the employee’s regular auto insurance coverage.
As I said above, I’ve talked with several companies in the past, when I was in the role of running deliveries more often. None of them had commercial-use coverage, except as a very expensive add-on. (double the premium or so).
Yes, it is expensive and you’re nuts not to have it. You are confused about one thing though:
“I was told that the training program specifically says they do not provide any coverage. Wow. All those kids running around with no insurance.”
What that statement from the company says is that they do not provide any coverage for the driver’s liability or for his or her car. It does not mean that the company does not have coverage protecting itself which is what hired and non owned coverage does; it protects the employer.
Exactly what their coverage is. From what I was told, they don’t have any coverage at all. I really can’t believe that. The manager had been asked straight out if they have HNO, and the answer was no. But, it wasn’t the GM of the store. I"m just curious now, I don’t really care.
It is quite possible that they do have coverage in the form of an insurance policy…But the reason is probably not because they choose to not have such a policy but rather that they are “self insured”…That means if and when a claim arises they look after defending it and paying any costs they are ordered to pay…So this in not as unbelievable as you may think…
PS…As far as I know Yum Brands (Pizza Hut, KFC, Taco Bell, etc., etc.) is self insured…
I dont think the insurance companies can tell if the car was being driven for pleasure or work. I just had an accident about 3 months ago, and I was never asked what i was doing in the car. They just fixed it.
Well if the car you got hit by has a big topper lite on top or a full body wrap… I am sure your insurance co will want to know. A good police report should also note all this info. As well as the 100 iphone pics that just got posted about that pileup on the highway with the Dominos guys on his roof! Insurance is not cheap…but if done right it is not a killer. If you cannot afford coverage than you are a liability to me and everyone else and I could care less about you. There is a big difference between self insured and not insured. At a point we became self health insured but had 300 people buying in monthly and carried umbrella coverage for the big things…cancer, organ transplants,…etc. Oh, and both came up! We never self insured our semi fleet or product liability coverage.
To all: I have lived the very highs and very lows of the business world. I have had success and failure. I have used unique ways to achieve better returns on items. Back when I was 17 I bought $3000 worth of Milwaukee tools off the back of a delivery truck at a Dairy Queen for $200. I lost that receipt. One thing I have never done is put my employees or myself into a known hazardous situation…or one that could have adverse effects on others around me. If you work hard and the time is right…things tend to work out. Sometimes they do not…and that sucks the most. Lost time, relationships, and MONEY! I will get behind anyone willing to take a risk and go for it. On the same note…and this really applies to this post and the buying my first place post…if you have to start out breaking the law or working or hiring illegally…then slow down and start over. You think starting and running a business is tough…try it while living 3 sets of lies and books and all the tax and bank guys coming from every different angle. Also what happens when you make it big but your books say you have lost money for the last ten years? OH…tell the banker to “Trust You!” LMFAO with that one!