Transcription
Hey guys, welcome back to T Man Talks! I'm Jasmine.
And I'm Monica.
Today, we are just going to talk about how we went about finding insurance for our NEMT business when we started back in 2019.
Yeah, so when we started back in 2019, initially we did a lot of research, just shopping around in the industry and trying to learn a little bit more about the type of insurance we would need. Luckily, we had built a relationship with an individual who was once in the NEMT industry, and she shared with us her insurance agent. We reached out, explained what we were trying to do, and the type of insurance we needed for our vehicles. She shopped around on our behalf, and when she brought us back a quote, the first quote at the time was about, I think, seven thousand dollars.
Yeah, again, that was initial. We were just doing our research and our due diligence. A couple of months passed, and when we were ready to purchase our insurance policy, the quotes we got back were several. I think we got a quote back for like twenty-one thousand, one for seventeen thousand, and I think the cheapest one we got was for thirteen thousand, and that was per vehicle.
Right, so we got the quote for seven thousand. At the time we got the seven thousand dollar quote, we were not ready to move forward because we had not yet purchased the vehicle. We were just kind of shopping around to see how much insurance was going to cost us. Then, once we finally purchased our vehicle, which was maybe five months later, we went back to the same insurance agent, and she shopped around for a new quote. Like Monica said, she came back with those high quotes, and we were like, "How? Why did it increase so much over a short period of time?"
She just explained to us that it wasn't any of our driver history or anything like that; it was just that these insurance companies don't like to write policies for new businesses. I think at that time, there were only like two insurance companies that were writing new business in California, right?
Right, and the premiums were really high. Either it was one that wasn't writing new insurance policies, or two, because you were a new owner coming into the industry, they didn't want to take a risk on writing you an insurance policy. So that was the issue that we kind of ran into.
However, we also get asked a lot of times, "What do you guys do? How do you pay for your insurance?" So let's tell them how we pay for it.
So, when you first start your business, you want to make sure that you open up a business bank account, a checking account. In doing that, you also want to go ahead and apply for business credit cards and lines of credit. Those are all options of different ways that you can go about paying for your insurance if you need to, if you don't have the cash up front. When you're first getting started, if you know you're starting a new business, you might want to write that into your business plan. You can set aside cash for the next three to six months to cover your insurance expenses. You just have to make sure that you include that in your business plan.
That's something else to consider. Also, back to the story: we got the quote, and we didn't have a choice. It was like, "Okay, we have this van, we have our company, we have to get started." So, we were later hit with, once we told our insurance agent, "Yes, we're ready to move forward," we were thinking that we would be able to make monthly payments on this premium, and we weren't. The amount had to be paid up front for the year. We didn't have the option of paying monthly, although I know in some states, different insurance companies will give you the ability to pay monthly. But this particular insurance company didn't give us that option, so it was either pay in full or go with a third-party lender.
Yeah, take a loan, and they would attach, like, what is it?
So the cost went up, like three thousand dollars on top of the original premium.
An additional three thousand dollars, yeah.
So we didn't want to go that route, so we went ahead and just took care of the cost that we needed to because we knew that this business was lucrative and that we would be able to make our money back in time.
Yeah, so those are just things to consider when you are doing your research and due diligence. Again, before you get into the business, of course, shop around. Go ahead and get quotes so you'll know what to expect and so you won't be caught off guard.
Yeah, so this is just a quick little tip: things that you can do. Find a good agent to work with, and have them shop around for different quotes. That way, when you're ready to start operating your business and you reach back out, you have a good general idea of what to expect, and you won't be caught off guard.
I will say, in this industry, insurance is probably the highest, most expensive thing that we have as far as expenses. So, once you make it past that insurance issue, you're good to go. You'll be on your way to generating revenue so that you can continue to grow and scale your business.
We just wanted to share our story with you. If you have any questions regarding anything that we mentioned, definitely go ahead and leave a comment below. Or, if you want to share with us what challenges you're having, we're able to do a discovery call. Go ahead and look on our Instagram page, or we'll put a link below for you to schedule a 15-minute discovery call. That's also available to you.
But other than that, yeah, we're going to hop off. I hope this information was helpful to someone out there. Like always, best of luck to you and your business journey, and we wish you well.
Ciao! Until next time, guys. Bye!