For those of you involved in the Phoenix food truck business, you know that one of the most important and expensive things you are required to have is insurance on that 4 wheeled mobile treat delivery system.
I know, I know, that damn insurance guy is always looking to sell you coverages that you don’t need. Or do you??? As a Farmers insurance agent here in Phoenix that specializes in food truck insurance, I’ll answer some of the most common questions I get asked from food truck owners…
How much should food truck insurance normally cost and am I paying too much?
The answer to that isn’t a simple one. There are A LOT of factors that go into deciding how much your monthly insurance payment will be – there’s the cost to repair/replace your truck, the driving record of the person operating, the zip code where the truck is stored overnight, AND the coverages you choose – all of these (and more) play a part in deciding your price.
From my experience, a ballpark number for good insurance should run you anywhere between $150 per month to $550 per month. That’s a wide gap but there are a lot of factors that go into deciding these rates (The only way to get an exact number is to call an insurance specialist and get a quote).
What’s the biggest mistake food truck owners make when it comes to insurance?
The BIGGEST mistake people make is purchasing the cheapest insurance policy they can find. When shopping for insurance based on price alone, you’re leaving yourself open to getting reduced or incorrect coverages. This will likely end up costing you much more in the long run and you could even lose your business if there is a claim against you.
The standard liability coverage to get into a food truck event here in Arizona is $1 Million Dollars. I’ve even seen it as high as $3 Million for some of the bigger events. Get the right coverage the first time. Some of those “cheaper policies” have hidden fee’s and exclusions that you won’t find out about until after you’ve signed up.
Aren’t all insurance companies pretty much the same?
Absolutely not. Any insurance company can give you an ID Card saying that you’re covered, but there are only select few that stand out when it comes time to file a claim. Go with a reputable company that you’ve heard of before. That oddly-named insurance company out of Connecticut that you bought online isn’t going to take care of you like a local insurance provider will. This is your livelihood! Don’t cut corners when it comes to this type of insurance.
How do I choose between plans or companies?
Sitting down with a real, live specialist in this field and going through coverages that are important to you is unbelievably important. You need to know what you’re paying for and understand it. Someone that can answer all your questions and guide you along the way is paramount in this line of work. I might be a little bit biased because I’m a Farmers Insurance agent, but Farmers does have the most comprehensive food truck policy on the market today.
Do you have any final tips for me?
There are some coverages that I HIGHLY recommend to my clients (and cost next to nothing):
- EPLI Coverage protects you from claims by employees for sexual harassment and wrongful termination. Big coverage, little cost. If you have an employee, you need it.
- Mobile Business Interruption Coverage is very inexpensive and pays you the money that you would have earned during a busy weekend if your truck is in the shop getting repaired due to an accident. You missed out on that big event, but your wallet doesn’t have to.
- Non Owned Auto Coverage extends your food truck insurance to someone else’s vehicle if you asked them to run an errand for you. If they were to get into an accident while taking a quick trip to the store for you, you’d be responsible. Having this coverage protects you and literally only costs a few dollars per year.
- Get a quote at least 4 weeks before you plan on serving your first lemonade. People that plan ahead are a much lower risk to the insurance companies. Lower risk equals lower price.
- If you’re pulling a food trailer with the family pickup truck, you’ll need commercial insurance on the pickup as well. Most people I speak with don’t have a commercial policy on this vehicle and run the very high risk of not being covered by insurance in the event of an accident.
- Ask your insurance agent a lot of questions! Don’t ever assume that you’re getting the right policy just because you picked the first company that popped up on your google search. Interview your agent and make sure they know what they’re talking about before you give them your credit card info.
Now get out there and fill some of those hungry bellies with your delicious treats……just make sure you have the right insurance first!