Your Auto Insurance Questions, Answered

The safety of homecare workers is a huge concern these days, but it’s easy to forget the dangers of caregivers and others getting behind the wheel of a vehicle. In fact, time on the road can be one of the greatest risks to your staff and their clients. 

In a recent online panel, HomeCare heard from these insurance experts: 

• Tony Canci, vice president of underwriting for Philadelphia Insurance (PHLY)
• Brent Jones, president and owner of West’s Insurance Agency
• Gabriel Bergeron, regional manager for PHLY’s northeast region
• Mark Diseroad, vice president at PHLY 

Here’s just some of what they shared about how to protect your team and your organization when caregivers are behind the wheel of a vehicle.

HomeCare: What are some of the high-risk scenarios we might be talking about in terms of operating vehicles and working with clients?

Tony Canci: The most noticeable loss exposure we see in the homecare space within the auto line of business is non-owned claims. Now non-owned auto, for those that might not be familiar, are vehicles that your organization does not own, lease or hire—essentially, vehicles your employees own and/or client-owned vehicles. And to put it into more of a perspective, the average insurance costs I would say, for non-owned auto is say somewhere between $500 and $2,000—of course, it could be higher, but that’s on average, so not too great. But when Philadelphia Insurance witnesses a claim, our average payout is closer to $175,000. Fortunately, there’s not a ton of loss activity, we typically see between 20 and 30 claims per year. 

Brent Jones: Tony’s absolutely correct; $175,000 is the average non-owned auto settlement. However, that’s definitely not reflected in the more catastrophic claims. We’ve seen claims into the seven figures, and unfortunately are working a claim right now that’s reserved at $2 million including the umbrella. So they can be quite severe. And the truth is the coverage limits that you carry do not limit your risk. If it’s an egregious claim or you’re letting somebody drive who has a bad driving record, that’s when you can have settlements beyond what your insurance actually covers. 

HomeCare: What’s the most worrisome scenario in your mind? 

Jones: The scenario that I view as the most hazardous is when employees drive in a client’s vehicle with a client in it. The reason is there are a lot of unknown factors in that scenario. For example, is the vehicle adequately insured? Is it adequately maintained? Is there a waiver in place where the employee or the client acknowledges that the employee is allowed to drive the vehicle? Is the employee comfortable driving that vehicle? One of the largest open claims we have now is an employee driving a client vehicle: They took a wide right-hand turn and they hit another vehicle. The vehicle they were driving was a larger vehicle, and the employee may be used to driving a smaller sedan, so many of those unknown factors are what create a more hazardous risk in our in our viewpoint.

Mark Diseroad: These types of claims can definitely present significant exposure—non-owned vehicles being driven by employees where a consumer passenger is injured and the employee was at fault. Not in all cases, but typically they’re elderly, or they’re in a compromised health status with comorbidities. And if they are injured (and get an attorney) … it’s going to be alleged that their condition was aggravated. And that’s going to create increased exposure regarding the value of that claim. We’ve seen a lot of cases where an elderly customer is injured, may be hospitalized, and eventually passes away due to a condition that’s not directly related to the injuries in the accident. But it’s going to be alleged the injuries and contributed to what they call a downward spiral, resulting in the customer’s death and then potentially a wrongful death claim being pursued. And if a consumer elderly has been living independently, and is then injured while being transported by an insured employee and afterward requires assisted living, that then becomes a major component of their damages model. 

HomeCare: So what can you do at various stages of the process to make sure your employees are safe drivers? Are there things that you should do maybe even before you bring somebody on board, or as part of the hiring process? 

Gabriel Bergeron: Motor vehicle record (MVR) checks, the formalization of consistent policies in terms of ensuring people are fully aware of what the organization does and does not allow … so it’s consistent in what is considered acceptable in terms of criteria around their MVR should be highlighted. (That’s) for consistency’s sake, but also to prevent the employee from saying, “Hey, you’re picking on Gabe, for example, when I have the same record as someone else in the organization.” Now, there’s a streamlined, consistent process that the organization is holding true in highlighting exactly what they find to be okay on that record. If there’s a driving while intoxicated, no, thank you—we don’t want you to be operating a vehicle for that organization. 

One question we get from organizations is what’s the cadence in which we need to run these MVRs? The ideal situation would be you’re running them every single year. The good thing is that more and more states, there are about 30 of them currently, have a driving verification system in place through the Department of Motor Vehicles (DMV) that once you enter that employee into the system, the DMV will track the motor vehicle record and incidents that are transpiring on the back end, and then they will notify you if there’s a serious event.

Jones: People ask, what’s the contemporary standard for assessing someone’s ability to drive? Really, it’s three things: Make sure they have a valid driver’s license, make sure the vehicle they’re driving has insured by a personal auto policy, and run their motor vehicle report. But to Gabriel’s point, it’s not just collecting the report, but actually looking at it and and reviewing and approving it prior to either offering them the job or allowing them to drive for work purposes.