Rideshare and delivery drivers have a slew of things to worry about, largely due to your status as independent contractors. Without the cushion of corporate benefits, drivers often have to pursue options for necessities, with insurance at the top of the list.
Insurance is something that drivers may not realize they need… until they do. There’s nothing sadder than getting your car totaled and still being stuck with the remaining payments… except, perhaps, a family that’s left with no source of income after a driver’s death.
Who wants to think about that, right? There are many concerns drivers might have about their insurance status. In this post we review those by describing 5 mistakes you don’t want to make, including:
- Assuming, “It will never happen”
- Not comparing policies
- Buying too much insurance
- Not buying enough insurance
- Neglecting the big picture
We’ll also discuss an option for protecting you and your family from the ultimate loss, with coverage you can count on and afford.
Insurance: What price for peace of mind?
When you signed up to drive and/or deliver for your company, you were required to prove that you had basic insurance on your vehicle.
In fact, before you can even drive a vehicle, you have to have basic insurance. This protects you, and it also shields other drivers who might be involved in an accident with you.
Your basic insurance covers your vehicle, and to some extent, bodily injuries that might occur as the result of an accident. But what about other aspects of engaging in day-to-day life? You may not think about it much, but your insurance needs go far beyond basic automobile coverage.
For example, do you have health insurance? What about homeowners’ insurance, or renters’ insurance if you rent a house or apartment? Do you have a plan for how you’ll survive if you can’t work for an extended period of time? And, especially important, what will your dependents do if the worst should happen?
With all these (and other) considerations, insurance can get pretty complicated. To make it even more confusing, insurance companies generally specialize in a certain type of coverage and/or policy. For example, if you have a medical insurance policy, you wouldn’t be able to add a rider for valuables in your home.
Because insurance is so complex, it’s easy to make mistakes when we buy it. Let’s look now at some of the errors drivers need to avoid, and some ways of not spending too much money while still getting everything you need.
The 5 mistakes you can’t afford to make
Mistake #1: Assuming “It will never happen”
Considering the expense that insurance can represent, it’s reasonable for people to weigh the likelihood of something catastrophic happening against the odds of going through life without such an incident.
But this can be a big mistake. Let’s say you just don’t think it makes sense to pay for health insurance. You might be a reasonably healthy person, someone who exercises regularly and eats a balanced diet. But suppose you’re out for a jog one morning, when your foot hits a divot in the dirt, and you take a spill. You might come out of it totally unscathed… or, you could suffer anything from a broken bone to a closed head injury.
The cost of medical treatment for something like that could easily escalate into thousands of dollars. Do you have that kind of money stashed away to cover such a calamity? The truth is, few people have that kind of money to spare. That’s why it’s smart to be reasonable and take precautions against sustaining huge financial losses even from minor injury.
Mistake #2: Not comparing policies
The ubiquitous, often humorous, ads for insurance that appear online and on TV are designed to convince the public that the funniest character is going to offer the best prices and coverage—which, of course, isn’t necessarily true.
It always pays to compare policies, for cost and for coverage. This applies to car insurance as much as liability insurance for your business. It always pays to shop around. If you purchase from a broker, ask for a chance to compare the policies under consideration, so you know you’re getting the best deal.
Mistake #3: Buying too much insurance
This is what can happen when you’re not careful about reading the fine print. While those policies can be long and arduous to read, you need to read them anyway. It’s important to know what you’re getting and how much you’re going to pay for it.
How could you end up buying too much insurance? One way is inadvertent duplication; you might forget that you already have roadside service through your auto club or your car dealer, and end up paying extra for it inside a car insurance policy. Or, you might get talked into buying insurance against water damage to your home, even though that’s already covered in your basic homeowner’s policy.
Mistake #4: Not buying enough insurance
This is one of the most common mistakes people make. A glaring example is “gap insurance,” which kicks in when your car gets totaled, even in a minor accident. Many people don’t bother with gap insurance—and that can be a huge mistake. Here’s why…
Your basic insurance policy will cover the resale value of the car, but it won’t cover the difference between that and the amount you owe on the loan for the vehicle. Let’s say your $20,000 car just got totaled. It’s easy to assume that the insurance company would pay what it’s worth, but it won’t. It’s likely to be more like $10,000 or $12,000. Do you think the financial institution that gave you the loan is just going to forgive and forget the $8,000 to $10,000 difference? No, they’re not.
Gap insurance would cover you in such an instance. The policy pays off the loan, so you won’t be stuck making payments on a car that’s in the junkyard. And though a policy like this might seem like a luxury when you first insure your car, it will more than pay for itself if you find yourself in this type of crisis situation.
Mistake #5: Neglecting the big picture
When you look at your life, you might think all your insurance needs all taken care of. You have health insurance, you’ve insured your vehicle and your home, and if you have a separate business, you’ve bought liability insurance. It’s true that you probably have most of the bases covered, but something crucial could be missing: life insurance.
Although it may be uncomfortable to think about your own death, it’s a fact that we’re all going to die eventually. So if you died tomorrow, what about those who are left behind? That’s where many people fail in terms of being responsible about insurance, and their long-term planning in general.
Life insurance makes up for the money you would ordinarily bring in to support your family. In the event of your untimely death, your family (or whoever you designate as your beneficiary) would have a set amount of money that they could count on until they could generate some other source of income.
This money could be used to pay for burial expenses, as well as other items your beneficiary would need. If you think about it, life insurance is the most important kind of insurance you can buy. And, you can get a life insurance policy for an affordable price.
This company “Bestows” the protection you need
When you shop for term life insurance, you’ll want to know that the company you choose is going to offer you the most protection for as little money as possible.
First, focus on what you need. You’ll want to provide your beneficiary with protection that will replace your income for as long as possible. You might have a job besides your driving gig that provides life insurance, but it probably won’t offer much. Most policies you get from an employer replace your income for a year or two.
What if you have dependents, like children or older adults who are unable to make money of their own? How well will they survive on one or two years’ worth of your annual salary? They’re probably going to need a lot more than that—which is why you’ll need a term life insurance policy such as the 10- and 20-year policies available from Bestow.
The terms of the policy, measured in years, indicate the amount of time the policy is in effect. For example, if you apply and are approved for a policy when you’re 40, the 10-year term gets you to age 50, and the 20-year term will last until you turn 60. As long as you continue to pay your premiums on time, the policy can provide, in the event of your death, and your beneficiaries will be well taken care of.
Bestow stands out for offering solid term life insurance policies, because they work with an A+ rated carrier. This means you can be very certain the company is capable of paying your benefits, again, as long as you pay your premiums.
There are details you’ll want to know, like how soon the coverage might kick in, and under what circumstances it might not pay. Check out the Bestow website to get all these answers and more.
You’ll find that Bestow makes getting and managing your policy extremely simple. Bestow handles everything from your application to your payments, and any changes you might want to make to your policy as time goes on.
So, please don’t get hung up by any of the mistakes drivers make when they purchase insurance, and by all means, get insurance that protects your loved ones, in case the very worst thing happens. Bestow is here to offer you solid policies, reasonable prices, and the most precious thing of all… peace of mind.
Bestow terms and conditions
Life insurance quotes provided by Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent. Term Life Insurance Policies offered by Bestow are issued on policy form LS181 and LS182, or state version including all applicable endorsements and riders, by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193. Products or issues ages may not be available in all jurisdictions. Limitations or restrictions may apply. Not available in New York. North American is rated A+ (Superior) by A.M. Best. Limitations or restrictions may apply. A+ (Superior), the second-highest rating out of 15 categories, was affirmed by A.M. Best for North American Company for Life and Health Insurance as part of Sammons Financial Group on August 19, 2020. A.M. Best is a large third-party independent reporting and rating company that rates an insurance company on the basis of the company’s financial strength, operating performance and ability to meet its ongoing obligations to policyholders. Our application asks about your lifestyle and health to avoid requiring a medical exam.