Insurance: A Guide to Coverages and Cost Factors for NEMT Professionals
In today’s world where court dockets are inundated with personal injury and liability cases, it’s critical to learn as much as you can about available insurance coverages. By choosing the right policy and complimenting your insurance with NEMT software for small business, you can protect yourself and your property from the financial and emotional burdens associated with personal liability lawsuits.
Understanding How Insurance Works
Actuaries are the insurance professionals who assess the risk of an individual or business and set appropriate premiums based on their findings. The formula that is calculated into who pays what for insurance is based on a number of factors including:A driver’s age and motor vehicle record: Younger drivers and those with tickets, accidents, or points on their license will incur greater expenses relative to insurance.
Type(s) of vehicle(s) being insured as well as customizations, safety features, and additional equipment on the vehicle. Backup cameras, blind spot warnings, and similar equipment can all reduce your payment for insurance.
Height, weight, and class of a motor vehicle (Passenger, commercial, livery, etc): Larger vehicles such as vans and buses are usually pricier to cover than a standard passenger car.
The primary use(s) for a vehicle(s): (Personal, business, NEMT, delivery): Business use policies will cost more, but offer more extensive protection compared to personal policies. As an NEMT professional, you’ll need the best coverage for both your drivers and passengers.
The mileage a vehicle is driven in a given time period. The more you drive a car, the greater its exposure to losses caused by accidents or other circumstances.
Who will be transported in the vehicle: (Passengers with specific medical or mobility needs, ambulatory passengers, etc.): Additional coverage for liability and personal injury protection would help minimize risk of losses caused by personal injury or wrongful death settlements resulting from an accident or other incident.
How many vehicles are on a policy: Some insurance providers may offer discounts for protecting multiple vehicles.
Where the vehicle will be garaged: Location of your base depot and whether your garage is equipped with a security system or guarded by a fence or gate play into the cost of insurance for you as an NEMT operator.
Number of claims filed by an individual or business: Underwriters take a close look into this because the dollar figure paid out in a claim is generally much higher than the amount the claimant has paid into the policy in premiums over its history.
Premiums are the regular payments made by a large group of policyholders so that an insurance provider has the necessary funds to pay out claims. Although we all wish our premiums were lower, insurance actuaries need to set them at a rate that satisfies the financial needs of policyholders while also guaranteeing there’s enough to pay out claims when they are filed. Offering insurance rates that are too low would result in more claims being denied or the insurance company going out of business.
Types of Insurance Coverage
Liability (Bodily Injury): Pays for the medical expenses incurred by drivers and occupants of other vehicles involved in an accident. This includes but is not limited to:
- Transport to medical care center
- Medical bills
- Physical therapy
- Lost income from missed work due to injury
Property Damage: Covers repairs or damages to the other vehicles involved in an accident. The following are included in property damage coverage:
- Repairs to dents, dings, or other physical damage to vehicle
- Reimbursement for cost of loaner car while primary vehicle is being repaired
- Estimated cost of a new vehicle of equal value if the original car involved in an accident is deemed a “total loss.”
- External property disturbed or destroyed in the course of a collision (Utility poles, signs, mailboxes, buildings)
Personal Injury Protection (PIP): Protection that covers some medical expenses for your driver and all occupants of your vehicle regardless of fault. Specifics on PIP coverage vary from provider to provider and policy to policy.
Uninsured Motorist Liability (Bodily Injury): This covers the medical expenses for you and the other occupants of your vehicle regardless of the insurance coverage (or lack thereof) carried by the other driver(s) involved in a wreck. This is a very important coverage to carry with many drivers operating vehicles either without any insurance or with inadequate coverage.
Uninsured Motorist Property Damage: Pays for physical damage to your vehicle even if other driver(s) involved in a crash are driving without insurance or are underinsured.
Comprehensive: This coverage pays for theft, fire, vandalism, or damages caused by most natural disasters. (Fallen trees, hail, lightning)
Collision: Covers all repairs to your vehicle caused by an accident. This includes physical/cosmetic damages and mechanical repair/replacement of components.
Workers’ Compensation: Covers costs incurred by your employees due to an on-the-job injury or accident in one of your vehicles.
Umbrella Coverage: An additional insurance product that reaches beyond the limits of your auto and homeowner’s policies. This coverage can kick in once your liability, property damage, and/or homeowner’s limits have been exhausted. Some umbrella policies offer up to $1,000,000 in additional coverage for $150-200/year. If your NEMT is registered as a sole-proprietorship or partnership, you should seriously look into this coverage option.
Though not mandated in every state, all of these coverages are recommended to give yourself, your drivers, and your family the best protection should the worst case scenario happen.
In regards to NEMT operations, the mandated coverages vary from state to state. Generally, all states require that you carry a commercial policy with higher coverage limits than a standard personal policy. Since you’re driving passengers with medical and/or mobility needs, you’ll need to give them as well as your drivers the best in insurance protection should the unfortunate occur.
Factors That Affect Premium Costs
Much like a personal policy, the rate of your premium is directly related to the number of vehicles you’re operating. If you have ten vehicles, your rate will be higher than if you you’re operating five. If you’re operating strictly cars for ambulatory passengers, your premiums will generally be lower than if you’re also operating wheelchair vans and stretcher-equipped vehicles. The reason behind this is due to the greater risk of incident that comes with additional on-board equipment such as wheelchair lifts and ramps or additional straps to secure gurneys.
When hiring drivers for your NEMT, it’s very important to conduct thorough background checks to limit your liability and protect yourself and your business. Including these safeguards to your hiring process for drivers can also help you with insurance costs.
Criminal Background Check: Drivers with criminal records, especially those like DWIs are a liability to both you and your passengers.
Drug and Alcohol Screening (At the time of initial hire and randomly throughout a driver’s employment)
A Detailed Motor Vehicle Report (MVR) Check: By running this prior to a new employee starting, you can see information pertaining to tickets, accidents, and other driving- related incidents in their history.
Tracking Your Drivers: GPS technology has made it much easier to know where your vehicles and drivers are at all times. Transport and logistics software can also assist you in making sure your drivers are at the location they’ve been assigned to when they’re supposed to be.
New Hire and Refresher Trainings on Safe Driving: Weather conditions change in many locations seasonally. Hosting a winter driving seminar in the autumn will help your drivers navigate snowy or icy roads more safely and efficiently. Likewise, holding a training on driving in rainy/stormy conditions would benefit drivers during the spring and summer months. Annual trainings for awareness of motorcycles, bicycles, and pedestrians in the spring, as well as seminars for sharing the road with school buses in the late summer, should also be implemented.
Geographic Footprint of Your Business
Similar to real estate, insurance costs are tied very closely with location. These are the biggest geographic factors that affect insurance rates.
Zip Codes: Actuaries for insurance companies assess risk and set premium rates by data collected on a zip code-by-zip code analysis.
Population: The odds of an accident increase in places where there are more people, streets, and cars. Therefore, you are likely to pay more for insurance if you operate in a large city compared to a rural community or small town.
Parking: It costs more to insure a vehicle in neighborhoods where it’s common for drivers to park their cars on the street rather than in a driveway or parking lot.
Number of Accidents: Premiums tend to be higher in areas where there are a higher number of accidents and associated claims. Remember, the money used to pay out claims is circulated back into insurance companies through the payment of premiums.
Crime Rate: Coverage costs increase relative to the rates of auto theft, break-ins, street racing, or other crimes linked to driving in a specific region.
Highway and Traffic Patterns: Locations with complex highway networks will cause drivers in that vicinity to pay more for coverage. There are many more accidents on a sixteen lane freeway with express/local lane groupings and transfers than there would be on a country road.
Speed Limits: In comparable areas, policies will be more expensive for drivers living where there are faster speed limits. Some states/regions have speed limits as high as 85mph while others still maintain the once national speed limit of 55mph.
Cost of Living: Expect to pay more for insurance in places where living costs and prices for consumer goods are sky-high.
Tips on How to Save on Insurance Costs Without Sacrificing Coverage
Conduct regular and thorough background checks on all of your drivers
Equip your vehicles with additional safety features (Backup cameras, blind spot warnings, etc)
Host regular training sessions for situations that are season-specific to your area. (winter weather, motorcycles, deer or other wildlife, school buses, etc.)
Choose the policy and coverages that are right for your business. Being overinsured or underinsured can cost you in the long run.
If you want to pay less on your premium, choose a higher deductible plan. You’ll pay more if and when you have to file a claim, but your regular bills will be lower.
Shop around: Compare policies, premiums, and coverages among multiple insurance providers.
Practices to Minimize Risk of Incidents
Better pre-employment screening for all employees and drivers (Criminal background checks, MVRs, drug testing)
Regular safety trainings for all personnel regarding on-board equipment (lifts, straps to secure wheelchairs and stretchers)
Schedule random drug and alcohol screenings for all drivers.
Keep up on routine and preventative maintenance for all vehicles in your fleet.
Schedule daily inspections for all drivers on all vehicles before they leave for trips.
Trainings for drivers in regards to any warning signs in the mechanics of vehicles, and give them the ability to immediately take unsafe vehicles offline.
Implement transport maintenance software to help you monitor all drivers and vehicles and keep up on maintenance and insurance requirements.
ISI Technology and Insurance
As a specialist in non emergency medical transport software, we understand how overwhelming it can be to operate your business. Our customized software is designed specific to your individual needs and can include the following features to assist you with protecting your vehicles and drivers.
A portal for all vehicles to help you keep up on routine maintenance to your fleet. (Oil changes, inspections, etc.)
Automated reminders that let you know when a specific vehicle is scheduled for preventative care. These can be set to remind you any amount of days in advance of the due date.
Customized auto-reminders that advise you when insurance premiums, registrations, or inspections for any or all of your vehicles are about to come due. You can set these notifications to any timeframe you wish.
GPS Tracking and monitoring of all vehicles in your fleet so you can protect yourself against drivers who are using your vehicles for personal use on company time. There have been documented instances of drivers going shopping while passengers waited outside in cold wheelchair vans for over an hour.
A depot deviation feature that lets you know the variance between a driver’s worked hours and when they returned to your base location. This can uncover such incidents as drivers napping on the clock or using your company’s vehicle with your name on it to go to the liquor store or gentlemen’s club.
As no two NEMT companies are the same, neither should their insurance policies be. By educating yourself on insurance coverages, choosing the best policy for your needs, and pairing your insurance plan with the best NEMT software to monitor your drivers and vehicles, you can reduce your costs and the stress associated with operating your NEMT business.