You employ drivers with excellent safety records for your taxi company and you make sure that they always use defensive driving techniques. However, even if they are vigilant, other drivers could be less careful and could cause an accident involving one of your vehicles. Worse still, these drivers may not carry sufficient insurance to pay for the damages they cause. An underinsured motorist policy can easily be added to existing taxi insurance to cover these extra costs.
What Is an Underinsured Motorist?
The legal definition of an underinsured driver varies by state. Generally, it is defined as someone whose liability limits are lower than those needed to cover the damages that he or she has caused.
How Does Coverage Work?
If your driver has not caused the accident, your insurer seeks payment from the insurance company of the other motorist. If the liability limit of his or her insurance is lower than the outstanding expenses, your underinsured driver coverage will pay these costs, up to the limit of the policy.
Your taxi company does all it can to avoid causing accidents on the roads and carries adequate insurance to cover any contingency. Nonetheless, other motorists may not have sufficient coverage. Investing in an underinsured driver policy will ensure that your company does not have to pay any outstanding costs should an accident occur.