I don’t mean to sound like an alarmist… but I actually do. My job is to help educate social service organizations about the possible outcomes and make good decisions. I’ve included links to three devastating vehicle accidents at the bottom of this article so you can see what happens when a vehicle accident goes wrong.
The quickest way your social service organization can have a $1,000,000 claim is if you put 4 people in a vehicle and they’re involved in an accident.
Yet when I review insurance programs, it’s very common for me to find operations with insurance limits less than $1,000,000. I get why people do this.
Auto insurance for social service organizations is very expensive. As I write this article in 2024, the average cost per unit I see can range between $3,000 – $5,000.
It’s hard to find. The list of companies willing to offer auto insurance by itself is virtually non-existent. It’s most common to buy auto insurance in conjunction with liability insurance. But if you’re with an inexperienced broker, or if you’re splitting business between brokers, or if your claims experience is problematic, it’s very common to end up with less advantageous results.
With all this in mind, here are my thoughts and recommendations regarding auto insurance.
1. Carry at least $1,000,000 of Auto Liability insurance
I’ve included 3 news articles that reference catastrophic vehicle accidents. If 4 people are permanently injured, it’s very easy to accumulate $1,000,000 of injuries.
2. Large Vehicle Accidents damage your reputation and impact your community.
I’ve had clients with fatalities. The organization is permanently linked to the family of the person that passed away. It sounds reductive, but no amount of money can bring the person back from the dead. Yet all an insurance company can do is pay for attorneys and a settlement.
The example I’ll give comes from my Alma Mater, Taylor University.
During my time at the school, there was a catastrophic vehicle crash. Students working in the catering program were killed in a wreck.
They canceled classes the day after the accident. I remember it was quiet on campus. I remember seeing a car full of girls driving around and crying.
We learned two girls survived the wreck. They were so disfigured that the families couldn’t identify them. One passed away, and one survived.
As time passed and the survivor recovered, the family realized that there had been a case of mistaken identity. Their family member had passed away and they had been sitting at the wrong bedside.
The vehicles have long since been replaced. I would guess that after 20 years, the medical bills have been paid.
The memories don’t go away.
3. Train your drivers
This is an organizational challenge. It’s difficult to hire people. Then it’s hard to make sure they’re ready to do the job you hired them to do.
That said, it’s surprising how many organizations have no training program at all.
A vehicle accident can change the trajectory of your organization. Make sure that your drivers are prepared to do the task you’re asking them to do.
4. Use Telematics to monitor driver behavior
Let me speak to every manager’s anxiety here:
“I wonder if my employee is doing their job right now.”
Before Telematics, there was no way to observe how your employee used the vehicle. Now, Telematics can give you insight into how fast the vehicle is being driven, where it is being driven, and how long it takes.
Put the Big Brother concerns aside on this. It’s impossible to manage something you can’t measure. Telematics gives you the data you need to manage behavior.
5. Have a written fleet safety program
A written fleet safety program gives an objective standard to measure against.
It documents how the vehicles are to be used. It documents acceptable behaviors. It is the measuring stick that you can use when there is an incident.
If there is no measuring stick, it will be hard to create accountability.
6. Keep your Auto insurance with same company that provides your liability insurance
In the social service marketplace, the way to get the best rates on vehicle insurance is to pair it with your General Liability insurance.
There aren’t any special “discounts” that come along with this. However, it does give the insurance company multiple ways to be profitable when insuring your operation.
Before you scoff at the idea of an insurance company being profitable, keep in mind that unprofitable insurance companies go out of business. Then insurance is even more expensive.
Auto insurance has been generally unprofitable for insurance companies. Pairing it with a more profitable product allows them to offer more advantageous rates.
Also, it can be difficult to obtain other coverages like Hired and Nonowned Auto Liability and additional Umbrella if you purchase Auto insurance by itself.
7. Consider using smaller vehicles with lower seating capacity
15 passenger vans are very useful and it’s hard to match their utility. They also roll over easier than minivans. They brake slower. And drivers don’t like them.
If you can accomplish your programming with the same efficiency using a minivan, consider the minivan.
I know people don’t think of insurance this way, but when you have something terrible happen in your operation, you first call the authorities, then your spouse, and next you’re calling your insurance broker.
I’ve been on the receiving end of some very serious calls. I’ve talked through abuse allegations, deaths, and vehicle accidents.
I’m saying from experience — the fastest way that a social service organization will have a catastrophic claim that alters the trajectory of your organization is with a vehicle accident.
I hope by sharing these stories, that I’m preventing you from ever having to call someone like me from the wreckage of a vehicle accident with a police officer standing next to you.
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