Dealerships often let their employees drive their merchandise. Whether they’re taking the vehicle for a test drive right after it arrived on the lot or have to pick up something for the office, there are numerous reasons why auto dealership employees end up behind the wheel. This works out fine, insurance-wise, as long as the employees are sticking to their approved driving hours and aren’t letting their friends and family members drive the vehicles. When the opposite happens, they become unauthorized drivers, and insurance policies often won’t cover any damages or injuries, especially if the driver wasn’t supposed to be in the car.
How can you stop unauthorized driver claims? What exactly is an unauthorized driver? Keep reading to learn the answers to these questions and more.
What Is an Unauthorized Driver?
In order to understand the impact of an unauthorized driver, you first need to know exactly what one is. Basically, your employees are authorized to drive the vehicles on your lot during the day for business purposes. Those same employees become unauthorized drivers when they use the vehicle without company approval, run personal errands with it, or allow someone who doesn’t work for your dealership, like a friends or a family member, use it.
Should your employee get into an accident while driving a company vehicle with permission and for business reasons, your insurance will more than likely provide the required amount of coverage. The problem lies when that employee becomes an unauthorized driver in that same scenario. Insurance could refuse to cover the repairs or medical bills because that driver wasn’t allowed to be behind the wheel at the time of the accident.
Setting Up Some Rules and Policies
How can you ensure that your employees don’t become unauthorized drivers or let unauthorized drivers behind the wheel of dealership-owned cars? It all comes down to having some rules and regulations in place. Consider doing the following:
- Create Clear Written Policies
- Define who may drive dealership vehicles
- Specify what’s acceptable business use, as well as what’s personal use
- Outline disciplinary consequences for policy violations
- Limit Vehicle Access
- Implement key control procedures
- Use vehicle tracking or telematics systems when appropriate
- Maintain records of vehicle assignments
- Have employees sign vehicle-use agreements
- Conduct periodic policy reviews and training
The Risks Faced by Dealerships
There are numerous types of insurance available for dealerships due to the complicated nature of the industry. Thankfully, this part of the business is easy. You can eliminate some of the risks that your dealership faces with a solid policy in place to prevent unauthorized drivers. Your insurance company will thank you.
Have Questions? Contact Charlotte Insurance
Want to learn more about the importance of avoiding unauthorized drivers on your auto dealership insurance claims? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.