Outside Insights | April 2013 | By Rishi Arora

3 Tips for Food Truck Insurance

Food trucks double as a work vehicle and place of business, and need the proper insurance to protect operators.

Tips for food truck insurance
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There’s a food truck for every type of cuisine nowadays. Mobile eateries’ sudden rise in popularity has taken the country by storm, and just like other businesses, the trucks need to be insured, whether they’re operators’ main business or secondary source of income.

From 2011 to 2012, Progressive saw a nearly 20 percent increase in the number of food trucks it insures. Food trucks bring an interesting dynamic to the table, because they serve as both the owner’s work vehicle and their place of business.

Below are three things for operators to consider as they look for commercial auto insurance for their vehicle.

1. Understand coverage options. Whether you’re working with an independent agent or shopping on your own, it’s important to understand what you’re getting with your insurance. Cooking equipment can be costly, and insurance can give you the peace of mind that it’s covered in the event of the unexpected. Here are four types of coverage to consider as you shop:

  • Liability coverage: Accidents happen, and this type of insurance applies if you are at fault in an accident. It will help you pay for damage to the other vehicle.

  • Bodily Injury & Property Damage coverage: While your liability coverage covers damage caused to another vehicle if you’re at fault in an accident, it doesn’t cover injuries or property damage. This coverage does. It will help pay for injuries to people or damage to property caused by your truck.

  • Food trucks bring an interesting dynamic to the table, because they serve as both the owner's work vehicle and their place of business.

    Physical Damage coverage: This coverage falls into a couple of buckets: Comprehensive and Collision coverage. Comprehensive coverage helps pay for damage to your truck caused by an event other than a collision, such as fire, theft, or vandalism. Collision coverage helps pay for damage caused to your truck if you hit something. With both Comprehensive and Collision coverages, don’t just cover your truck; cover everything inside it. If you have expensive grills or stoves, include them in your limits, so you’re not on the hook to pay to replace or fix them in the event of an accident. Anything bolted to your truck can be covered by Comprehensive and Collision coverage, so choose your limits accordingly. If you don’t want to pay to replace it yourself, get it insured. Keep your receipts to make the process as smooth as possible if you ever need to file a claim, and keep your coverage limits up to date as you update your truck with new equipment.

  • Medical Payment coverage: If you’re in an accident, this type of insurance will help pay for your medical bills.

In addition to coverages, check with each company on how much it is charging for additional insured under your policy. The cost can vary greatly depending on your insurer.

2. Ask about discounts. After you’ve decided which coverages and limits make the most sense for you, ask your insurer or independent agent about discounts. There are plenty of ways to save money on your insurance through discounts. Discounts to look for include:

  • Paid in Full Discount: If you can pay your entire premium up front, many insurers will knock some money off your total.

  • Package Discount: If you have a current General Liability or Business Owner’s policy, you could be eligible to save money on your auto insurance with this discount.

  • Business Experience Discount: This discount will help experienced business owners. It offers savings to customers who have been in business for more than three years.

  • Continuous Coverage Discount: Don’t let your coverage lapse without renewing your policy. Keeping continuous coverage can help you save a little money. Additionally, many insurers will surcharge you if you have a lapse in your coverage.

3. Research the claims process for each insurer. If you’re ever in an accident, you want to get back on the road as soon as possible. Time is money, especially for a food-truck operator, whose business takes place inside their vehicle. Check to see if your insurer has:

  • 24/7 claims service: Is your insurer available whenever you need them? See if they have 24/7 call centers and round-the-clock roadside assistance.

  • Dedicated claims representatives: Some companies hire third-party claims reps. Check if your insurer has specially trained claims reps who understand your business.

  • A network of repair shops: Insurers with network repair shops can usually get your vehicle fixed quicker, and many of the shops guarantee their work for long periods of time.

Knowing about your coverages, available discounts, and claims options puts you in a position to make the best commercial auto insurance decision as you insure your food truck. Having the right coverage lets you work worry-free and concentrate on what matters most: making great food for your customers.

Rishi Arora is commercial auto product manager at Progressive. In business since 1937, Progressive is a market leader in commercial auto insurance and the No. 1 truck insurer. For more information on Progressive's coverages or to find a local independent agent, go to http://www.progressivecommercial.com.