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Driver’s education
1 Aug, 2004 By: Michael Weisburger PMP Special ReportsWhen it comes to car insurance, few insurers collect enough money to cover their losses and make a profit. Insurers that insure service business owners and their fleets have found doing this business profitably to be nearly impossible. While we continue to offer auto coverage, for example, it’s not without a high degree of ambivalence — a terrible loss ratio on the auto portion of a program can adversely affect the profitability of the entire program.
We’re living in an age where road rage is the norm, where service vehicles of all kinds crowd the highways. And everywhere you look, people are chatting on their cell phone, eating lunch and scanning a map — all while barreling down the road. Small wonder, then, that insurers get nervous.
All this cell phone use in particular scares me sometimes, and I’m guilty of it! It goes back to that “it can’t happen to me” mentality. I use the cell phone even when I know it’s taking away some of my attention from the road.
I had my first accident, after decades of having a license, about eight months ago. I rear-ended someone on my way to work. As I approached a yield sign after exiting the highway, I assumed that the person in front of me would continue moving, since there were no vehicles to yield to. Fortunately, I was moving at less than 10 mph when I hit her.
There was a lot of damage to my front end, which, by the way, seems to be made of plastic. Thankfully, my airbags didn’t go off, although from the looks of my car you would have thought they should have. Evidently, that adds another $3,000 or so for the repair.
There was no damage to her vehicle, but I got a sick feeling when she got out of her car and I realized she was several months pregnant. Luckily, she was not injured. The worst part? I knew it was my fault.
The cost of a crash
I’m happy to say that my insurer responded quickly to my claim and put my mind at rest. They also contacted the other driver immediately and made it so that I didn’t have to be involved. When there are no injuries, these things are a lot easier to handle. But think of all the expenses associated with having an accident with a company vehicle:
- Decreased revenues
- Decreased profits through
lost productive time - Lost good will
- Possible loss of employees
and retraining - Medical costs
- Cost to repair vehicle
- Cost to replace vehicle, either
permanently or temporarily - Possible increase in insurance,
or even cancellation of insurance
The DWI factor
A client recently got upset with us because we told him one of his drivers would not be allowed to drive a company vehicle and remain on the policy if we were to renew it. The fact that the employee had two Driving While Intoxicated (DWI) violations from three years ago didn’t appear to be an issue to our client. In fact, nothing I could say would convince him otherwise, because this employee was his best technician and had simply had “bad luck.”
I understand his position, because he was trying to run a business profitably, and getting good help these days is nearly impossible. By the same token, I have the responsibility of being the “messenger” for the insurance company — and the news I bring isn’t always good. It’s a difficult balance.
Your options when faced with an employee who has DWI/DUI violations on his or her record are bleak. You could opt to be less than truthful to your insurer and not reveal the record, but that’s hardly something I would recommend. It will catch up with you, eventually. Otherwise:
- Find an insurance company willing to accept your word that the employee’s days of driver infractions are over. Such companies are few and far between, and the ones out there willing to take a high-risk driver are obviously going to charge accordingly.
- Take the employee from behind the wheel. Have him or her ride with others or take a desk assignment.
- Require the employee to attend driver intervention, alcohol treatment or similar programs offered in your state that might mitigate the insurance risk status. Many states require such program attendance, even for the first offense. For a clearinghouse of information related to state regulation and legal issues, visit www.dui.com.
- Require that the employee carries his or her own insurance and drive a personal vehicle. However, this would not protect you from being sued in the event your employee was involved in an accident on company business. In addition, you should have your employee carry at least $1 million in coverage on his or her vehicle. Your insurance may become excess over the insureds in the event of a claim that’s brought against the employee and you.
Be proactive
While rules vary by state as to how long an infraction remains on your record, it’s typically there for at least three years. Multiple infractions can lead to license suspension, revocation or jail time. We have had situations where it’s the owner of the company who has the infractions. They end up paying triple the insurance for their own car.
Unfortunately, statistics show that someone who has that kind of history is not likely to become 100% reformed. I would suspect that most insurance companies believe that a person who has had a bad driving history is likely to have a bad future record, as well.
If you haven’t encountered this situation yet at your firm, chances are good that you will. I recommend that you become proactive, not reactive. Establish a company policy that if someone has had a DUI/DWI infraction in recent years, he or she can’t be hired. For existing employees, especially if it happens on the job, make it a policy that it is grounds for dismissal — or at minimum, placement in a nondriving position.
Also, make it clear that drinking and driving is not part of your company culture. Mothers Against Drunk Driving (www.madd.org), for example, welcomes business support in local communities for its student awareness chapters. Involving employees in this type of program may make them think twice about decisions they make.
Change company culture
Accidents happen, and even the safest driver can make a mistake. I challenge you to be proactive at your company — your greatest assets are out there on the road, and you should arm them with as much education and support as possible. For example:
- Have “accident free” incentives for employees. Many companies are starting such programs.
- Examine your policies. What should your balance be between safety and productivity? What makes good business sense? There’s no one-size-fits-all answer, because every company’s different. However, would productivity decrease radically if you implemented a “no cell phone while driving” rule, for example?
- Implement training. There’s nothing wrong with a reminder now and then on what constitutes safe driving. The National Pest Management Association has some good materials, and our own site (www.weisburger.com) has an online Safety Strategies program that is another great place to start.
Auto safety is universal, and applies to anyone who gets behind the wheel of a car. All we can do is lower our odds of getting into accidents by obeying the laws, reminding ourselves of what we should be doing when we’re behind the wheel, and remembering that there’s always room for improvement. PC
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