Driving a personal car in lieu of a company-owned vehicle may seem to minimize an employer’s liability, but companies can be held partially liable for damages in the event of an accident, and if an insurer discovers the individual was driving for business it may take action against the employer for subrogation purposes. When employees will be driving their own cars for work, there are several actions that you can take as an employer to reduce the risk for your company.
If the employee is making a work-related phone call or taking part in any business-related activity, the employer will be held accountable. When employees will be driving their own cars for work, there are several actions you can take as an employer to mitigate risk.
Understanding Non-owned and Hired Business Auto Liability Insurance
Does your California business have potential automobile loss exposures that you are not aware of? You’ve taken all of the necessary steps to ensure that your own fleet operation is properly insured in the event of an accident. But what about the potential loss that arises from individual employees who operate their own personal vehicles for company business? This is where non-owned and hired business auto liability insurance comes to play.
Do Your Employees Drive Their Own Car For Business?
There are many situations that present a potential for you to be held accountable for the actions of your employees while they are driving their own vehicles:
Do administrative employees use their own vehicles to go to the post office or bank on your company’s behalf?
Do you occasionally send an employee to pick up a visiting client at the airport?
Have you sent employees to pick up lunch, drop off mail or pick up office supplies?
Have you ever rented a vehicle while on a business trip?
Do you have a sales force to which you provide a car allowance for business use of their personal vehicles?
If an employee has an accident under any of these situations, your business can be held accountable and sued for damages. Basic business automobile policies only cover employees while they operate company-owned vehicles to perform company business. Your best protection: non-owned and hired automobile liability coverage. This type of coverage will kick in if there is an accident and your company is found legally liable.
Typically, an employee’s personal automobile insurance will provide primary insurance to both the employee and the business if the employee is using their own vehicle on company business. However, there is the chance that charges will exceed the employee’s policy limit and would then be passed on to the company. Without non-owned and hired automobile liability coverage you may be vulnerable to a potentially costly exposure.
Purchase Hired and Non-owned Coverage
Any company that allows or requires employees to use their personal car for business should either purchase hired and non-owned coverage or add it to an existing automobile policy. Hired coverage is for autos that are not owned by the company or the driver, and non-owned coverage protects vehicles owned by employees but used on behalf of the company. In the event of an accident, these policies supplement the driver’s personal auto policy, which is typically activated first. For minimal yearly premiums, these policies generally protect the company only, not the car or the driver.
What Does Non-Owned Auto Liability Insurance Cover?
Non-owned and hired automobile liability insurance covers bodily injury and property damage caused by a vehicle you hire (including rented or borrowed vehicles) or caused by non-owned vehicles (vehicles owned by others, including vehicles owned by your employees). This coverage is typically added to your business automobile policy; however, it can be added to your general liability policy if you do not have a business automobile policy. It protects your company if it is found legally liable as a result of an automobile accident that you or your employee has in a hired or non-owned vehicle while on company business. Hired automobile coverage replaces or augments the liability coverage offered by automobile rental agencies.
Non-owned and Hired Automobile Insurance: The Basics
Here are the first things you need to know about non-owned and hired automobile coverage:
Who needs non-owned and hired automobile coverage?
If you or your employees ever drive vehicles not owned by your business for business purposes, then you need non-owned and hired automobile coverage.
What is non-owned automobile coverage?
Non-owned automobile insurance provides liability protection when an employee occasionally has to drive his or her personally owned vehicle for business purposes. It assumes that the vehicle is not owned, registered or contracted in your name or on your behalf.
What is hired automobile coverage?
Hired automobile insurance provides liability protection when you or an employee is driving a rented, hired or borrowed vehicle.
Use a Company Policy to Reduce Risk
According to the National Safety Council, 28 percent of car crashes are attributable to cell phone use while driving. Since distracted driving accidents can have serious implications for companies, a company policy that emphasizes the importance of driving attentively and restricts the use of mobile phones is essential to preventing employee accidents in all vehicles, both personal and company-owned. In addition, the policy should clearly state when the use of a personal vehicle will be expected or allowed, and all employee job descriptions should specify when driving a personal vehicle will be a job function. As a condition to employment and thereafter at least on a yearly basis, those employees driving personal vehicles should be required to provide:
Proof of a driver’s license
Motor vehicle safety inspection certificates
Copy of auto insurance certificates proving liability coverage at or above an established company limit including personal injury and medical limits
Proof that the employee has declared the use of the auto for business to his or her insurer
Exhaustive lists of all prescribed controlled medications
Further, you should reserve the right to check motor vehicle records annually or more frequently.
Enforce the Driving Policy
After the driving policy has been instated, it should be actively communicated and enforced. Managers of employees utilizing personal vehicles should be directed to monitor the safety and maintenance of those vehicles. Employees found out of compliance with the company policy should be subject to reassignment or termination. It is every employer’s responsibility to ensure its employees’ safety on the job, and those that use personal vehicles on business are no exception.
What Should You Do Next?
If you do not already have this type of coverage and your employees occasionally use their own vehicles for business purposes—even quick errands—consider adding it to your business insurance package today. Consult with GDI Insurance Agency, Inc. to review your business automobile and general liability policies to ensure you have adequate insurance coverage and liability limits for non-owned and hired automobiles.
Any type of loss exposure, no matter how small, is too big to ignore. Call us today at 209-634-2929 to ensure that your California Business Auto Insurance meets your needs.
Ask your GDI Insurance AgencyBroker for more help assessing your company’s risk regarding the use of personal vehicles, or to learn more about hired and non-owned coverage.
Let your GDI Insurance Agency Broker help you set up your Vehicle Fleet Safety Program.
So you’re shopping around for California auto insurance. What do you need to know? Well, there are lots of ways – at least 11 – that you can save on car insurance. Many of these money-saving ideas may apply to you.
One Insurer, Multiple Policies – Do you have a homeowners insurance or renters insurance policy? If so, is it with the same insurance company that provides your auto insurance? If the answer is no, you’re paying too much – for both policies. Almost every insurance company that sells auto insurance wants its policyholders to also buy homeowners insurance or renters insurance from that company.
These insurers offer so-called multi-policy discounts. Usually, these discounts are at least 10% and some insurers apply the discounts to both the auto and the homeowners/renters policy.
* Tip. Talk to your agent about multi-policy discounts.
Good Driver, Good Price? – It’s no secret that the better your driving record, the less you will pay for auto insurance. But did you know that most people qualify as “good drivers” and are eligible for discounted premiums? Some good drivers pay a lot more than others, however.
Many auto insurers are actually a collection of several insurance companies in which each caters to a certain type of driver. The worst drivers go in one company, the best in another, and a lot of people wind up in one of the middle companies.
These middle people pay less than the worst drivers, but more than the best. The thing is, many of these middle people have driving records that are just as good as those who are insured by the companies that offer the lowest rates. Yet these middle people are paying more. Why?
The usual reason is that they don’t know any better. No one told them which insurance company in the group had the best prices. And, probably, no one told them there was even a group of insurance companies. If you have a spotless driving record, there’s no reason you shouldn’t be paying the lowest price a group of insurance companies has to offer.
* Tip. Make sure you’re getting the best discount for your driving record. Talk to your agent. And remember, be a safe driver. It will save you money.
The Beauty of the Bus (or Other Mass Transit) – Do you drive to and from work? If you do, you are literally paying a premium to do so. Insurance companies charge you significantly higher premiums if you drive to work. And, the longer your commute (in miles, not minutes), the higher the premium.
* Tip. Some drivers should consider mass transit. Yes, there’s a price there, too. But you will reap the savings of gas and lower insurance costs.
Low Mileage, Low Price – On average, people drive 1,000 to 1,250 miles a month. That is what insurance companies consider average use.
* Tip. If you drive less than the average, you could be eligible for low-mileage discounts, which some insurers offer.
High-Profile, High-Cost – The type of car you drive is a major factor in what you pay for insurance. Is your vehicle a magnet for thieves? Is it more expensive to repair than most cars? If the answer to either of the last two questions is yes, you’re paying more than the average car owner for insurance.
Raise Your Deductible – The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $250 deductible and you have an accident in which your car sustains $1,000 in damage, you pay the first $250 and your insurer pays the balance, $750. The lower the deductible you choose, the more you pay. If you have assets, you can probably afford to absorb at least $250 and probably $500 if you have a claim.
* Tip. If it’s been years since you’ve had an accident, you may be better off raising your deductible and paying less each year for insurance.
Drop Unnecessary Coverages – Let’s say you have an older car, one not worth very much. There’s really little point in having collision and comprehensive coverages. You don’t have much to protect. Remember, too, that you have to subtract your deductible from any potential payout you might get.
* Tip. As a general rule, any car worth less than $1,000 shouldn’t have collision and comprehensive coverage. Between the deductible and the extra expense of these coverage’s, the cost is probably greater than the benefit. How much is your car worth? An auto dealer can tell you, or there are plenty of books that have values of vehicles going back many, many years.
Discounts, Discounts, Discounts – Auto insurance companies offer several discounts for a variety of reasons. The car has automatic seat beats, air bags, anti-lock brakes, anti-theft devices, etc. The driver is a good student, which is especially valuable if you have teenage children who will be on your policy.
* Tip. Make sure you are taking advantage of all the discounts available to you!
Taking the Defensive – Many insurance companies also offer discounts to those who have taken defensive driving courses recently.
Low-Cost and High-Cost Areas – Are you planning to move? If you are, you should take into account the cost of insurance. Generally, the more urban the area, the higher the premium. The costs can vary even within a community.
* Fact. Rates can really vary from state to state. If you’re living in New Jersey, Massachusetts or Hawaii, you’re paying several times more, on average, than you would in North Dakota, South Dakota or Idaho.
Credit Where Is (Or Is Not) Due – Is your credit record better than your driving record? If you have a good credit record, you could be eligible for discounted premiums from several auto insurance companies.
* Fact. Many insurers now use your credit history as a major factor in determining what to charge you for auto insurance. In some cases, with some companies, you could save money by shifting your business to an insurer that uses credit as a rating factor – even if you have a so-so or poor driving record. There is another side to this coin. If you have a poor credit history, you could save money by moving your auto insurance to a company that does not use credit as a rating factor. Many insurers do not use credit as a factor.
* Tip. Regardless of your credit status, you should talk to your agent to make sure you have the best situation given your credit record, good or bad.
Whatever your driving record or coverage needs, you should shop around, or let an experienced insurance professional shop around, for the best deal for you. There are literally thousands and thousands of coverage options from hundreds and hundreds of insurance companies.
In addition, not only should you try to get the best deal you can, you also need to make sure you have all the coverage you want/need. Using an Independent Insurance Agent is usually your best bet to get the most value for your auto insurance dollar.
Your Trusted Insurance Agency
At GDI Insurance Agency, Inc, we take a personal interest in our customers. We like to share information that comes to help you protect yourself and your family from financial loss. If you have any questions, regarding this information or your insurance coverage, please don’t hesitate to give me a call 1-888-991-2929.
Well this one’s going to be kind of a fun page for me. It takes me back 37 years ago. This page is on shopping for low, even cheap auto insurance rates.
I have seen people pay 4 times what they have to for the right coverage, just because they don’t know how to shop for cheap auto insurance and they rely on infomercials to make their buying decisions.
As an example, if you have a family you likely have or are about to have teenage driver, right? I am asked all the time how do I get the best auto rates for young drivers. “What do I do with my teen driver, and how do I insure them without breaking the bank or getting bad coverage?”
Here is the Insurance Insiders Answer
(Grant is an insider because Grant Davis has been selling insurance for 37 years now!)
The thing is it is very easy to get the right coverage and cheap car insurance with or without young drivers. But it’s not easy if you don’t know what to do, or you rely on infomercials that really only offer one companies quote, or the new guys that offer lots of quotes from high risk insurance companies. That’s just expensive! An example I use a lot is It is kind of like having a really good contractor. I watch him build something, its clean, straight and just wonderfully art like.
I on the other hand can’t even built a dog house that’s not tilted. So who do you want to build your room addition? Here is the difference. The contractor knows what he is doing, and he does it perfectly because he knows how to do it, and he’s been doing it for a long time.
I’ve been doing insurance for 37 years. I won’t go so far as to say I am perfect. But I do know my way around rates and policies pretty well as does my staff. We really can help.
Here is the first real key to getting cheap auto insurance rates. It really comes down to this. You have to go with an insurance broker that’s large enough to have more than one or two insurance companies to choose from. GDI Insurance Agency, Inc. gets you quotes from 46 insurance companies by putting your info into a computer in about 5 minutes or less. Here is the kicker. If you want to go with one of those companies, we just hit a few more key strokes and its done. You don’t have to call another company and start over like the “we will give you our quote and 7 other quotes” people make you do.
Call GDI Insurance Agency, 888-991-2929, let us know you want to get an auto insurance quote. Give us your information on your car and dmv info, (we will look up your record for you).
That’s all you have to do. You’re done. Just give us a few minutes to crunch the numbers and get the best rates you can imagine.
GDI Insurance Agency, Inc.will help you make sure you have good liability insurance, because if you hit somebody you want to have enough liability insurance to take care of them. If you want your car covered we will have good comprehensive, fire, theft, vandalism, good collision, in case someone runs into you or you run into them, and you will want uninsured motorists, if someone hits you without insurance we’re worth to have a little limited insurance.
Next year when it comes time to renew your insurance that all might change again, what do you do next year?
Well I’ll tell you what we do. We hit a little button, we’re so automated we tap this little button on your account screen which connects your account directly right back to the same rating system we started with. In about 30 seconds we rerate your whole account, it’s all there, and now we got the 46 quotes updated for this year for you! You could always stay with the same company, matter of fact most of the time we recommend if it’s just a little bit of a difference you just stay with the same company.
But here’s the deal, you could do what you want, because if you decide to change companies we hit another button, and you just change companies, that’s all there is to it.
On our end it’s a little bit more than that, but from your end of the deal it’s no more complicated than just saying go with the less expensive company!
How nice would it be if once a year your insurance broker, GDI called you up and said, “Hey, we just checked your rates and there is one that’s $67 or $670 a year less expensive”, you might say to us, “You know lets change companies. Or let’s stay where we are”. Either way it’s up to you. We just promise to always give you the best coverage and rates we can find!
Really, just call GDI Insurance Agency, Inc. and let us doing the shopping for you. How long would it take you just to get a list of 46 competitive companies? Let alone get quotes from them all and sort out all the coverages.
GDI Insurance Agency, Inc. will do it for you quick and painlessly.. 1-888-991-2929
37.5007547-120.8492279
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