Taxicab and Limousine insurance in Ontario has been on the rise. GTA Cab with a very low loss ratio has seen an increase of Policy prices from an average of $3600-$5000 per vehicle per year to average of $5500 – $8900 due to broker pricing that dictates according to the municipality the vehicle operates in. Advocates believe some form of a solution lies in a combination of proper risk management, loss control, taxi drivers and fleets taking on some element of self-insurance, and insurers coming up with an appropriate rate.
Brokers say the province’s most populous city of Toronto, which has approximately 10,000 licensed taxi drivers for 4,849 cabs, is the prime area of concern. Companies looking to insure taxi cab fleets in the Greater Toronto Area and surrounding areas struggle to find underwriters willing to write their policy. Some have got out of the business of placing cab insurance altogether. Brokers are being rejected by the Insurance Company’s finding themselves helpless in providing a solution.
Auto insurance is mandatory in Ontario, so taxicab and limousine fleets can ultimately find coverage with Facility Association, a so-called “market of last resort”. High-risk drivers who can’t find insurance in the voluntary market are targets of Facility.
Rates in Facility Association are sky high, considered to be unfeasible in some situation. Taxi cab drivers who don’t want to pay high Facility Association rates can “shop around” for taxi cab fleet administrators that offer better insurance rates, in part because of the types of licenses the city offers. Toronto issues two types of licences: Standard and Ambassador.
There are 3,451 Standard licenses called ‘plates,’ as the Toronto Star reports, citing figures provided by the city. A plate owner can drive and rent out the cab, or hand it to an agent to manage. Plates can be sold, and the current market value is up to $300,000. In addition, there are 1,313 Ambassador plates. For these licenses, the cab must be operated by the owner, up to 12 hours a day. No other drivers are allowed. The plate cannot be sold and must be returned if the owner quits the business.
At the same time premiums are going down, claims for taxis have not shown any signs of decreasing. Taxi cab operators or drivers are on the road often, resulting in more frequent claims. Also, whereas large commercial fleets may offer drivers or operators worker’s compensation or employee benefits, other taxi cab fleets will not. These taxi cab fleets can only rely on automobile insurance accident benefits in the event of a claim.
Recently Data Analytic sticks have been introduced to the Auto Insurance market allowing the vehicle to send analytic’s of driving behavior/patterns. Insurance industry has recognized that implementing the sticks can improving driving patterns/habits along with keep vehicles conditioned and maintained. Companies have introduced 25% – 40% off insurance policies. Similarly Taxi and Limo Fleets and Brokerages in Ontario are advocating towards the Insurance Industry to recognize the value in rewarding drivers instead of ‘grouping’ them with ones with bad records.
Hopefully Drivers/Owner Operators, and Fleet owners can start receiving benefits of technology based tracking systems to ensure safety and reduce claims arising from poor driving behavior/patterns.