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How New Employees Affect Your Auto Insurance

How New Employees Affect Your Auto Insurance

How do I know if my auto insurance rates are going to go up when hiring a new employee?

Hiring a new employee impacts many facets of your business, including your insurance.  If the employee is to be included as a driver on your company auto insurance policy, there are ways to determine if your auto insurance premium will be affected.

In most cases the auto insurance premium will not be affected until the renewal of the policy, but in some rare cases it can be affected right away.  Here are three ways to determine whether a driver is going to affect your auto insurance premium.

1. Ask Your Agent

To determine whether an employee will affect your policy premium is to ask your agent to check the employee driving record.  Your agent will ask you for the name and date of birth of the driver, as well as the state and number of the driver’s license.  

An authorization form signed by the prospective employee consenting to the Motor Vehicle Report (MVR) request may be required.

There may be a charge for these services, so it is best to use this option only for drivers who have reached the final stages of the hiring process.  Your agent will NOT be able to provide a copy of the MVR for your records.  They also cannot advise you whether or not to hire the employee.  The only information the agent can provide is whether or not your insurance carrier would consider the prospective employee to be an insurable driver or an uninsurable driver.  If the driver is uninsurable driver and you choose to hire the employee, the insurance company may require you to sign a driver exclusion endorsement.

2. Contract with an MVR Provider

If you are in the habit of hiring drivers often, it may benefit you to contract with an online company that provides MVRs.  There would be a charge for this service, and you would still need to submit the MVR to your agent to add the driver, and drivers with violations on their records would be subject to underwriting assessment.

3. Ask the Employee to Provide an MVR

The most cost-effective solution is to have the prospective employee provide a copy of his or her MVR as part of the hiring process.  Some states may charge a fee to the employee for this information.  It is recommended that the prospective employee provide a recent, certified copy of their MVR.  This would need to be submitted to your agent and may be subject to underwriting assessment.

Your Hayes Insurance agent would be happy to help you determine the best MVR solution for your auto insurance needs.  Call or email for more information!

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