Understanding NEMT Vehicle Insurance
There are two big insurance questions for non-emergency medical transportation (NEMT) providers: 1) What does non-emergency medical transportation insurance cover, and 2) how much does it cost? Let us look at the various components of NEMT insurance, and what types of claims and scenarios they are applied to. In this post, we will discuss the different factors that affect NEMT insurance rates.
Setting insurance rates is all about evaluating risk. How likely is your organization to make an insurance claim? What is the likely severity of that claim? How are those risks multiplied across the number of personnel and vehicles that make up your organization? Once these and other parameters are established, a pricing structure comes into play that weighs risk factors and correlates them with a monetary value.
The various risk factors at play for an NEMT provider can generally be divided into three broad categories: Direct Factors, Historical Factors, and Forward-Looking Factors.
Direct Factors:
Direct Factors are those with the most set-in-stone rate structure. For the most part, they come down to a simple assessment of basic facts. NEMT providers have the least control over these factors.
Number of Vehicles/Personnel:
This factor is the most crystal clear: The more vehicles you have in your vehicle fleet, the higher your insurance rates will be. The same goes for the number of staff you employ. Rates are calculated on a per-vehicle and per-person basis, so as those numbers climb, so do insurance rates. If you consider this through the lens of risk evaluation, it makes sense: More vehicles equate to more potential for accidents and other claims.
Types of Vehicles:
When you get your personal vehicle insured, vehicle type plays a large role in your insurance rate. A sports car costs more to insure than an SUV. Why? For one, SUVs typically have more comprehensive vehicle safety features than sports cars. Furthermore, the types of driving undertaken in a sports car are generally riskier than those undertaken when driving an SUV.
The same concept applies to NEMT vehicles. Ambulatory vehicles, wheelchair vehicles, and stretcher vehicles (also known as ambulettes) each carry their own inherent risks. For example, wheelchair and stretcher vehicles are more expensive to insure, as they carry a greater risk of passenger injury. This added risk stems from the need to properly secure wheelchairs and stretchers. If not properly secured, they could move during travel and cause injury. This causes wheelchair and stretcher vehicles to have a higher incident rate than other types of vehicles, as more incidents take place without an accident or collision.
Location:
Individual states and localities have their own laws and regulations when it comes to insurance requirements. Among other things, these regulations consider unique geographic concerns, such as the area's physical attributes and inherent driving dangers. For this reason, the same NEMT company with the same vehicle fleet, the same staff, and the same insurance provider would be charged differently for NEMT insurance in one area of the country versus another.
Historical Factors:
In the insurance world, past performance is indicative of future results. For this reason, the history of your company and your staff plays an important role in evaluating risk and setting insurance rates. NEMT providers have a greater degree of control over these factors.
Experience Level:
The experience level of owners and managers impacts the determination of insurance rates. If company leadership has a proven track record of running a safe transportation company, that will help drive down insurance rates. For someone entering the field for the first time, there is no historical track record to examine. This adds uncertainty, leading to higher rates. Of course, if company leadership has a poor track record, this will cause insurance rates to rise.
Driving Record:
Driving records play a major part in NEMT insurance rates. The motor vehicle records (MVR) of every driver you employ will be checked thoroughly by the insurance company. Every aspect of that record comes into play, from speeding tickets, to moving violations, to accident records. A clean driving record leads to lower rates, while past incidents can cause rates to climb quickly. For this reason, the large majority of NEMT providers evaluate driving records as part of the hiring process.
Forward-Looking Factors:
All insurance calculations are forward-looking. Direct Factors and Historical Factors are analyzed to gauge the likelihood that insurance claims will be made in the future. Insurance providers also take a careful evaluation of Forward-Looking Factors, evaluating the proactive programs NEMT providers have in place to mitigate the likelihood of future risks. This is where NEMT providers can exercise the greatest control over their insurance rates.
Vehicle Maintenance:
Vehicles that are in good working order are less likely to be involved in accidents. This is why new vehicles typically cost less to insure than pre-owned vehicles: The new vehicles simply have not been on the road as much, and therefore haven't had as much time to accumulate wear and tear. Proper vehicle maintenance is a vital part of maintaining vehicle safety and performance. By instituting a detailed vehicle maintenance program and taking steps to ensure strong adherence to that program, NEMT providers can demonstrate their commitment to ensuring safe vehicle operation for years to come. This lessens future risk, and therefore serves to make future claims less likely. Decreased likelihood of future claims drives down insurance rates.
Training:
Continuous learning is a valuable tenant to instill in your organization. There is a wide array of training courses that can better prepare drivers to avoid risky situations in the first place, and to better respond in these situations when they do arise. By taking part in wheelchair securement training, your staff will know how to take the proper steps to secure a wheelchair before travel. By taking defensive driving courses, they can better deal with the unexpected out on the road.
These courses and others like them also help to instill a strong safety culture throughout your organization. Demonstrated completion of these courses will help to bring down insurance rates. Just as NEMT providers will typically review driving history during hiring, they will often require the completion of applicable training courses after drivers have been hired on.
What is covered?
Keep the van as safe as you can by making sure you are protecting it with the right types of commercial auto insurance. Here are the primary types of insurance you will need:
Liability Insurance – Liability insurance is normally required by law in all parts of the United States. This coverage is designed to protect other people from suffering losses that are caused when your wheelchair van causes an auto accident. Liability insurance primarily focuses on two coverage areas: Bodily injuries and Property Damages.
Bodily Injury - This section of your liability insurance policy helps pay for any injuries inflicted on other people from an auto accident. If your wheelchair van causes, or is found to be at fault for, an auto accident that causes people to get physical hurt, the bodily injury portion of your coverage pays for their medical expenses. When an injured person must be transported to the hospital for example, your bodily injury coverage can pay for the ambulatory bills and expenses. It also pays for the emergency room care, doctor’s visits, prescription medications, physical therapy, rehabilitation and other medical bills that are caused due to the auto accident. Bodily injury also pays for a person’s lost wages when they must miss work due to recovery times, and it pays for pain and suffering of the victims. When a person is killed in an auto accident, your bodily injury insurance can pay their funeral expenses as well.
Property Damage - When a vehicle or other property sustains damages from an auto accident that was caused by your wheelchair van, the property damages portion of your liability insurance will pay for the cost of repairs.
Liability insurance can provide your wheelchair van with protection at varying levels, based on the amount of coverage you select. You can choose a standard split-level policy or a combined single limit policy as well.
A split limit policy sets maximum benefit limits on two separate portions of an auto accident claim. Split limit policies will pay no more than the set limit per person for bodily injuries but no more than the total combined limit for all bodily injuries in an accident. It will also pay a separate maximum for property damages. Example: A liability split limit policy of $15,000/$50,000/$35,000 explains a specific payment maximum per accident. No more than $15,000 will be paid for any individual person’s bodily injuries in one accident; no more than $50,000 will be paid for the combined total of bodily injuries; and $35,000 is the maximum amount the policy will pay for property damages.
If you elect a single combined limit liability policy instead, there is no separate maximum limit defined for bodily injuries or property damages. There is just one maximum overall payout for the policy for each accident. A $50,000 combined single limit liability policy for example, would pay a maximum of $50,000 in damages per accident regardless of whether the damages were to people or property.
Medical Payments – Medical payments insurance is important coverage for a wheelchair van because it pays medical related expenses that arise for your van driver and any passengers who were riding in the vehicle at the time of the accident. Coverage is for paying medical and related bills, such as ambulance transport, hospital care and follow up treatments. This insurance protects your driver and passengers without regard to who causes an auto accident. It is not available in all areas however, so be sure to contact one of our licensed representatives to determine if it’s an option for your company’s policy.
Physical Damage Insurance – Physical damages insurance protects your wheelchair van itself. And it protects your company from having to pay the bills when the van is damaged or destroyed. This insurance is extremely important for your company if you lease your wheelchair van, or if you still have an outstanding unpaid finance loan because it provides you with the most protection possible. There are three types of physical damages insurance protection:
Comprehensive Physical Damage Protection – Comprehensive damages protects you from a number of potential risks, perils and hazards. It does not protect against damages and losses caused by a collision or caused when your van overturns. It does however, protect against losses and damages caused by theft, break ins, vandalism and natural events. If your van is damaged due to a tree falling on it in a storm for example, your comprehensive damage protection coverage will pay for the repairs.
Collision Protection – Collision protection is specifically designed to pay for damages and destruction that are caused by a collision or by a roll over event. If your van has a blowout and overturns for example, your collision damage protection will pay for the repairs. If the van backs into a building while trying to access a wheelchair ramp, the collision damage protection pays for those repairs as well.
Specified Peril (CAC) – Specified Peril coverage is also known as Fire and Theft with Combined Additional Coverage. This does not protect you against collision or roll over events. Instead, it protects you from just those perils that are specified on your insurance policy.
Uninsured or Underinsured Motorist - If your van is involved in an auto accident with another vehicle and that other vehicle was the cause for the accident, their liability insurance is supposed to pay for your bodily injuries and property damages. If the other driver does not carry insurance however, or if they do not carry enough coverage to pay all of the resulting bills, they are considered uninsured or underinsured. You can purchase protection against these risks with an uninsured or underinsured motorist policy. When the other driver is at fault but unable to pay for all of your damages, your policy will pick up the difference. This policy works much like your Liability policy.
Bodily Injury - As covered with Liability Insurance.
Property Damage - As covered with Liability Insurance.
Collision Deductible Waiver (CDW) - When you carry an uninsured or underinsured motorist bodily injury policy on your wheelchair van, you can qualify for a collision deductible waiver (CDW). The CDW makes it so that you do not have to pay your standard insurance deductible when you make an uninsured or underinsured motorist accident claim.
Take the time to review your vehicle insurance coverage and periodically look for more reasonable rates. Your status changes over time as your work experience and driver experience increases. You could lower your premium without sacrificing coverage.
