Know the Minimum Insurance Coverage you need for a Bus

Bus insurance coverage cost is subject to multiple factors but the protection you fetch can pay for financially disastrous liabilities following a bus crash.

Bus business is a lucrative proposition when mined properly. But just like any other business, it’s exposed to certain occupational hazards with serious implications. That said you cannot let these vulnerabilities to eat into your profits, or worst still, push you out of business.

Imagine your bus rams into another vehicle or object, taking a toll on life and property. If your liability is established, you have to bear the brunt. You are required to fund the victim’s medical care, vehicle, and other damages. Failing this, your business and assets are exposed.

That’s why there is charter bus insurance. The coverage saves you from the financially crippling implications of accidents and related liabilities and helps keep your business and assets intact. All your liabilities are funded by the insurer, which otherwise need to be met out-of-pocket.

Minimum insurance coverage requirement for a bus:

A bus isn’t a passenger vehicle. It’s bigger, accommodates more people and causes more damage. So, the coverage requirements of a bus exceed that of a passenger vehicle by a margin.

Courtesy Federal Motor Carrier Safety Administration (FMCSA), for a bus accommodating 15 or more passengers, the minimum liability coverage should be $5,000,000. The minimum coverage requirement nosedives to $1,500,000 for a bus accommodating 14 or fewer passengers.

What determines your premiums?

However, size is not the sole factor to determine insurance costs. Other includes:

1. Type:

Buses come in all shapes – charter bus, party bus, coach bus, sightseeing bus, tour bus, and school bus. Different buses face a different set of risks, and their coverage requirements differ accordingly. Say, a school bus involves higher premiums vis-à-vis any charter bus, tour bus or private shuttle. The liability risk is higher when handling and transporting kids, that’s why.

2. Location:

The premium costs are also location-dependant. In certain states, the cost is way higher than the national average. A bus plying in rural areas will attract lower charter bus insurance costs than the one operating in an urban center. Again, higher liability risk accounts for the disparity.

3. Route:

How far the bus is driven also factors into premium costs. Interstate buses need to comply with federal laws that are stricter than the state ones. Hence, they require more spending.

4. Accident history:

The insurer will be factoring in your driver’s accident history to determine the costs. If it’s accident-free, expect cheaper premiums. If not, you are in for some additional expenses.

5. Worth of the bus:

That’s a typical no-brainer. The premium costs are bound to be higher for a high-value bus.

What’s covered?

In 2009, America had 56,000 bus crashes, which accounted for 254 lives and 20,000 injuries. The figures must have risen significantly over the years. That calls for insurance coverage to pay for liabilities stemming from bus crashes. Here’s what a typical bus insurance policy covers.

• Third-Party Injuries: Say, your bus crashes into another vehicle causing physical harm to passengers in that vehicle. The charter bus insurance coverage will ensure payouts for the victim’s medical care, ambulance fees, medications, surgery costs, hospital stays, rehabilitation, and more. In the case of a fatality, the victim’s funeral expenses are covered.

• Third-Party Damage: If your driver is responsible for crashing the bus into another vehicle or property, the damages thus sustained are covered. The insurer pays for the repairs required to restore the damaged vehicle or property to its former self.

• Your Passenger Medical Costs: The driver and passengers on your bus might sustain injuries in a crash. The insurance coverage comes in handy to pay for their medical care. Best of all, the insurer makes payouts, regardless of who’s at fault for the situation.

• Bus damage: Bus involves serious investment. Should it be damaged in a crash, you’ll bleed money on repairs and replacement. Let the bus insurance cover take up all the costs involved. The policy has three components that cover collision, non-collision and specified perils. It’s imperative in case the bus is leased or you are yet to pay for it in full.

• UMC: Another driver ramming his vehicle into your bus is also a possibility. However, if he is uninsured or underinsured, the compensation might be hard to come by. Don’t worry, as your insurer will pay for all the injuries and damages inflicted by him.