Auto Rates Reduction: How to Manage Increases

Auto Rates Reduction: How to Manage Increases


Auto rates are on the rise. According to the National Safety Council, U.S. motor-vehicle deaths were up 6% in 2016, exceeding 40,000 for the first time since 2007. The council attributes the increase to lower gasoline prices and an improving economy, which have resulted in an increase in total mileage. It also has a lot to do with an uptick in distracted driving due to smartphones.

No matter what the cause, if you have employees or volunteers driving on your behalf, you’re probably feeling the pain of both increased accidents and rising auto rates. We can help.

Many of our carriers offer multiple tools to help their clients educate employees and set policies that can affect auto claims.

Set expectations about distracted driving
Anyone who drives for your organization should have a clear understanding of your expectations. That includes using cell phones and engaging in other distracting activities, such as eating.

• Establish a policy that covers when, where and how drivers may use their cell phones while working on behalf of the organization.
• Include a plan for informing and educating drivers – both existing employees and new hires.
• Address how you will enforce the policy.
• Follow through on enforcement.

If you allow drivers to use cell phones in any capacity while working, be sure to describe the circumstances that are acceptable – in an emergency, for example, or only when pulled off the road. You might consider extending the policy to anyone who is operating heavy equipment.

Select drivers carefully
Start with strong job descriptions for drivers and keep them updated. They should include qualifications, skills and standards for evaluation.

The driver selection process can include:

• Application including reference checks
• Interview
• Background checks including motor vehicle record review to see if they qualify to drive based on the recommended driving guidelines.
• Physical examination
• Written and Road test

Establish a driver-training program
To ensure your new and tenured drivers understand your policies, government regulations and organizational-specific driving needs, establish a driver-training program. Consider three types of training: orientation for new drivers, refresher training for existing drivers and remedial training to address any performance issues that arise.

A good place to start in terms of training is taking a look at your organization’s policies and procedures, as well as government regulations. Drivers should also regularly review the vehicle specs, driving routes and schedules. Lastly, procedures should be covered in depth, including: client handling, emergency and accident reporting.

Consider ways to recognize performance
Job performance feedback is important and can serve as an incentive. You also might want to establish a recognition program that calls out and rewards drivers for accident-free records, fuel efficiency, client satisfaction or other factors important to your organization.

So be sure to set clear expectations up front and stick to them when selecting your drivers. With ongoing training and reinforcement of positive performance, you may be able to deter rate and accident increases. I hope these ideas help you get a sense of what you can do to influence your organization’s auto rates and liability. Your insurance carrier may have similar materials to help you make a difference in your auto claims.

See also:
Auto Liability: Your Biggest Exposure
Bridging the Gap and Other Answers to Nonprofit Insurance Questions

auto ratesBy Linda Smart, Account Executive, Property & Casualty

Leave a Reply

Your email address will not be published. Required fields are marked *