If you are a business owner that uses fleet vehicles, it is essential to know who you are allowing/hiring to operate these fleet autos. Your business stands on reputation and assets, but if you aren’t careful, you could be jeopardizing everything you have worked hard to get. Your employees can either have a positive effect on your business auto insurance rates or one person could negatively impact those same rates. Read on if you want to protect your commercial auto insurance rates.
Research shows that premium hikes on auto insurance policies are most likely caused by at-fault accidents. Simply put, if you have been involved in several at-fault accidents, then you can expect to pay a higher car premium than someone who has no history of past accidents. Now, imagine if you are a business owner who hires fleet drivers. You are putting a lot of trust that your drivers will drive carefully, but how do you know for sure? It is essential you understand your employees’ driving habits and past driving history BEFORE you allow them access to one of your fleet cars.
Ways to Protect Your Commercial Auto Insurance Rates
Do Background Checks- It is recommended you do background checks on driver applicants prior to hiring. Knowing pertinent facts about the applicant can determine whether this person is likely to increase the risks to your company of a higher insurance premium.
Obtain an MVR on any Applicant- A MVR (motor vehicle report) is a must before hiring a driver for one of your fleet vehicles. This report shows past traffic violations, personal information, number of accidents, and drivers’ license status of the person(s) in question. Keep in mind that some of your fleet vehicles may weigh over 10,000 pounds and cost more than $80,000. Therefore, you need to exercise great caution when finding out the past driving history of any applicant before hiring them to drive.
Consider the Age/Experience of the Driver Applicant- Studies show that drivers from the age of 24 and younger are more likely to be involved in at-fault accidents due to their inexperience. In fact, many insurers will be reluctant to permit someone in that age bracket to be a driver on a commercial auto policy, especially if the vehicle weighs over 10,000 pounds.
Exclude Personal Vehicles on a Business Auto Policy- If you have personal vehicles on your business auto policy, it is recommended you remove them and insure them under a personal auto insurance policy. It only takes one at-fault accident to ruin a good loss experience and risk favorable pricing on your commercial Alabama auto policy.
Contemplate Your Loss Experience- Rates on a business auto insurance policy are based on certain key considerations to include the number of fleet vehicles being operated, the past claims history, the number of drivers you use, and loss control experience.
You may be entitled to discounts based on good loss experience credits; however, if you encounter several or just one careless driver, it can ruin your good experience for the entire organization, creating a hike in your auto insurance costs. It could take years to get the credit back to good standing if you start having at-fault accidents.
Do Your Homework on Driver Applicants
Past driving offenses are a huge predictor of the future. If you have multiple traffic violations and/or accidents, you will generally be considered a greater risk to your insurance company versus someone who has none. Simply put, a higher risk equates to a higher insurance rate so before you hire any fleet driver, find out what kind of risk he/she poses, or you could be jeopardizing more than just your commercial auto insurance rates.
If you have any questions about your business auto policy or the rates you are currently paying, contact our offices at Burkett & Associates and we will gladly assist you. We are here for all your Alabama business insurance needs.