The costs of running a taxi business are forever increasing at an alarming rate. For any business to be successful it has to manage and control its costs in order to make a profit. There are costs that are beyond the control of the taxi operators such as the price of petrol and interest rates charged on their vehicles.
Most operators always take a wrong route when they try to cut costs. This they do by not insuring their vehicles when fully paid up. A bad tax decision indeed – as most taxi operators have come to learn the hard way by losing their investment when their vehicles get involved in accidents or get stolen.
Clarendon Transport Underwriters (CTU), which has been in the taxi insurance business for the last 17 years, has developed a scientific rating score to arrive at a fair premium for individual taxi operators in an effort to cover the assets of their clients in a most effective manner.
Factors that influence insurance products pricing:
The make of the vehicle
The make of the vehicle influences the cost of insurance. Preferential rates are given to vehicles that are government-approved.
The availability of spares: The availability of spares also influences the decision whether to insure the vehicle and at what premium. The substantial difference over the makes of vehicles as others are more expensive than others to repair.
The area of operation: The province from where the taxi operates from plays an important role in determining the premium.
Affiliated Associations: The associations are not the same in terms of enforcing stricter rules on the roadworthy vehicles. Those that ensure that their member vehicles are always in good condition enjoy far better insurance premiums compared to those that are not strict.
Routes that the taxi uses: Some routes are on unsafe and dangerous gravel roads with high risk for accidents. All these factors are taken into consideration to arrive at a fair premium for their risk. The calculations are very scientific.
CTU has developed a network of brokers to sell their products. These brokers come mainly from disadvantaged communities. Surely the underwriting managers have every reason to be proud of supporting and developing black to be entrepreneurs.