One of the largest “hidden” fleet exposures
are drivers who drive their own personal vehicles for company business.
The main exposure is that they are not
insured or they are under insured.
A lot of company’s think they are immune
from impunity, as long as it not their vehicle. This could not be any more
wrong! Case law in New Mexico (and almost every other state) states that
the drivers insurance will be used as first line of defense in any claims,
and if the claim goes beyond that level of coverage, then the company’s
fleet insurance may take over.
Actually, there is special insurance for
this exposure. If you do not have it, then you may exposing company assets
directly. (That’s why you buy insurance in the first place!) Contact your
agent for more information about this coverage called “Non-Owned Auto”.
In today’s suit happy climate and an era of
outrageous claims, the level of insurance that an individual may cover may
not be enough to adequately protect you. Besides, lawyers go for the “deep
pocket” which is more likely to be your company rather than one of your
employees.
There is a simple answer. Make sure you
have non-owned auto insurance. Make sure that each driver who drives his
personal vehicle for business use is: 1) insured; 2) adequately insured.
Here are a few rules of thumb to follow:
-
If the driver has incidental use (less
than 25 miles per month), just make sure they can verify they have
insurance.
-
If the driver has more than incident usage
(25 -150 miles per month), then you may want to find out what levels of
insurance they have. (Remember, state statutory minimums in New Mexico
are $25,000 for single occurrence and $50,000 for multiple occurrence -
this won’t even pay for a decent Chevrolet let alone a night or two in the
hospital.) Make sure they have something other than the state statutory
coverage’s. You should contact you agent for suggested levels of
coverage.
-
For drivers who drive more than 150 miles
per month, set a policy for minimum acceptable levels of insurance.
Generally, limits should match what your company already has for liability
coverage. You may also want to set a policy that includes monitoring
their MVR on a regular basis and an acceptable driving record, as critical
to their continued employment.
Also for the “full time” driver, you want to
have them obtain commercial insurance and provide you with a certificate of
insurance. Some personal lines insurance can deny coverage, if the driver
does not tell them the truth about the usage of the vehicle. Requesting
commercial insurance forces the driver to tell his insurance company as they
do not give out certificates of insurance for personal lines coverage.
In the case of low or intermediate mileage,
you should make a photocopy of the insurance card they must carry in their
glovebox. You should then diary the expiration date for all drivers in a
tickler file or on a computer. This will make sure that their insurance
does not expire before they renew.
Hint #1: If you photocopy the insurance
card that they carry in the glovebox, it will not tell you the amount of
coverage they have. However, if you note that the coverage expiration is
month to month, then you can be very suspect that they are insured for state
statutory levels.
