The Importance of Policy Guides

Business vehicle program policies establish internal rules and regulations that need to be documented, reviewed, approved, and updated on a regular basis. How current is your organization’s business vehicle policy? Does it exist as a formal document? Do your drivers understand its contents, and are they in compliance?

To avoid misunderstandings with your drivers as well as to minimize corporate liability, take time to ensure that a business vehicle policy guide exists within your organization, and that it is up-to-date, complete, and communicated to employees. Suggestions for a developing an effective business vehicle policy guide follow.

First, be aware of alignment. Like most employee programs, it is important for your business vehicle policy to be consistent with internal and external regulations and guidelines. When creating your policy guide, be sure to check for internal contradictions or overlapping communications relating to insurance coverage, cell phones, and traffic violations. Also, establish program compliance with ISO 9000, OSHA, JCAHO, HIPAA, and Sarbanes-Oxley regulations. Although numerous vehicle policy guide templates are publicly available, it’s critical that your organization’s business vehicle policy is customized to your company and in alignment with relevant external regulations as well.

Second, include an acknowledgement form in your guide. Your employees need to know that it is their responsibility to read, ask questions about, and understand the contents of your company’s business vehicle policy. Place an acknowledgement - requiring employees’ signature - at the beginning of the guide to ensure that employees will not miss it and actually read through the guide. The acknowledgement should be clear without sounding ominous or threatening. If possible, set aside time during the orientation process for employees to read the guide, and leave time for a question and answer period. Specify the date by which the acknowledgement needs to be signed and to whom it should be returned. Also, require that employees to sign the acknowledgement again whenever policy changes are significant enough to justify employee review.

Third, have a clear introduction and purpose. Overall, the introduction and purpose of the guide should set the tone for the business vehicle policy guide, and show that management stands behind its policies. Integrate the vehicle policy with your company’s mission, values and beliefs, and explain why the policy is important to your company and its employees. Introduce outside organizations which partner with your company in its vehicle program. Additionally, a signed message from a high level executive highlighting the importance of the program is also beneficial.

Fourth, make things very clear for the reader so that they can find specific subjects quickly. You don’t want employees spending too much time searching for pertinent information. Structure the contents of your policy guide into sections with clear headings and use short sentences for easy reading. Specific topics that should be addressed in your policy include:

1. Who is eligible to participate in the program
2. Expectations of participants
3. Information that is monitored by the company
4. What to do in the case of an accident.
5. Notifications of changes in driving privileges
6. Safety considerations and requirements
7. Tracking and review procedures

Fifth, keep the business vehicle policy guide up to-date. Oftentimes, a policy guide is created and then passed on to new program administrators over the years without any review or update. Establish a documented process to ensure regular review. As part of your policy review process, provide new employees an opportunity to give feedback regarding the ease of use and clarity of your policy guide; and evaluate recommended changes. At least on an annual basis, the policy guide should be reviewed and updated. Again, if changes to the guide are significant, you’ll want drivers to sign new acknowledgements.

Never underestimate the importance of your business vehicle policy guide. Having clear, up-to-date policies for your employees can save countless hours that come from misunderstandings. Both management and employees benefit from proper attention to business vehicle policy guides.

Understanding engine oil and taking proper care of your vehicle’s engine are paramount to gaining the maximum life from your automobile. Engine oil lubricates, cleans, and cools parts of the engine that are critical to proper operation.

According to the Car Care Council, engine oil consists of various weight mineral or synthetic oils combined with additives for engine protection. Oils come in single or multi-grades and must meet various oil performance standards. The American Petroleum Institute (API) has classifications for oil which are intended to address various engine oil applications. The most recent oil performance designation is ILSAC GF-4. These new oils offer significant performance upgrades and meet new specifications jointly developed by oil and auto industry experts. The oils meeting the new standards provide gasoline-powered car engines with several benefits, including better engine wear protection, a key to longer quality performance.

Oil can become contaminated by dust, metallic shavings, condensation, and antifreeze. Additives break down over time and can also act like contaminants. The Car Care Council recommends that you use the oil recommended by your auto’s manufacturer and change oil and filter every 3,000 miles or 3 months. The 3,000 mile rule is especially important if you operate your vehicle for multiple short trips, in a lot of stop-and-go driving, in both cold weather and in hot, dusty conditions, for towing trailers, or pulling heavy loads.

As you change the oil in your vehicle, do not forget about the oil filter. The oil filter is made of a high-strength steel housing with various kinds of filtering materials. An anti-drainback valve prevents oil from running out of the filter when the engine is off. The filters clean out contaminants, letting the oil freely move through the engine. When the oil filter becomes full or “clogged,” the oil and contaminants will flow around the filter right into the engine. Because of the damaging effects of the contaminants, this is not something you want happening for any length of time.

Use care when disposing of your old oil and filters. The Car Care Council estimates that a single quart of used engine oil has the capacity to pollute 250,000 gallons of ground water; and the oil from just one used oil filter can contaminate 62,000 gallons of ground water. As a result, it is important to put used oil into original containers or clearly marked plastic containers, and dispose of used oil properly.

Most people are familiar with gap insurance, coverage used to pay the difference between the actual cash value you receive from an insurance claim and the amount you owe on your auto loan. In the unfortunate event of an accident or theft, standard comprehensive and collision automobile policies only cover the current market value of your vehicle. Often times - and especially in the first few years of ownership - the current market value may be lower than the outstanding loan you have with your bank.  Gap insurance is typically a good option for a “new car” for two reasons. Depending on the model and make of the vehicle, many new vehicles can depreciate as much as 80% upon leaving the dealership. Additionally, thieves tend to show a definite preference for newer vehicles.

WALKAWAY Protection™, on the other hand, is a relatively new offering in the marketplace. It is designed to cover the difference between the balance due on a loan or lease and the depreciated value of a vehicle when certain life events occur. Those life events are job loss, disability, international employment transfer, loss of driver's license, critical illness, and personal bankruptcy. This protection can pay as much as $15,000 towards the balance of a vehicle loan or early termination charges on a lease and essentially protects you from negative equity.

If your laptop or other business equipment gets stolen out of your car, is it covered? Not by your auto insurance. In fact, the comprehensive coverage on your car only applies to such items specific to your vehicle such as the radio, stereo, CD, and cassette player. Your homeowner’s policy covers personal belongings stolen from your car, but this coverage is often very limited.

To protect other commonly stolen items (such as briefcases, purses, coats, presents, laptop computers, and cell phones), check your homeowner’s policy coverage limits. You can buy additional coverage and/or higher limits to make sure you have the protection you need.

If you use a laptop computer for business purposes, be aware that if it is lost or stolen, the location of the loss determines the coverage available. For example, if your laptop is stolen at home, the coverage limit may be $2,500, while if the loss occurs away from home, it is only covered for $250.

Even one speeding ticket can raise your auto insurance premium, and more than one can cost you thousands of dollars on your auto insurance. One reason speeding holds such a high price tag with many insurers is that it has been shown to cause more accidents. In fact, according to the Insurance Institute for Highway Safety, the crash rate more than doubled for drivers who had more than two speeding tickets in a three-year period.

While insurance companies and states vary, one speeding ticket can increase your premium as much as 27% from the company's base rate. Tack on a second traffic violation and your premium could rise an additional 40%, and you also lose your good-driver discount. So a premium that may have been $574 has just gone up to $1,071. After a third conviction, you can expect to pay roughly 63% more than you originally did. And since tickets stay on your driving record for several years, over three years you would end up paying $2,020 more than if you had avoided a ticket altogether.

There are specific actions you can take to clean up your driving record. Special state programs exist, so talk to your state’s DMV or local traffic court to find out about ways to erase your ticket. In Rhode Island, for example, if you haven’t had any vehicle-related violations in three years and then receive a minor one, you can ask that the ticket be dismissed. It usually is. In some southern states, authorities will agree to defer judgment if you don’t get any more tickets for the next six months.

Often your best alternative is to take a six-to-eight-hour traffic safety course for drivers. Policies vary by state, but often a minor speeding conviction can be wiped from your record and therefore go unseen by your insurance company. You’ll still have to pay the fine, plus an additional $50 to $80 in tuition and other costs, and invest a Saturday. Or, in some states you may be able to take the course online. Whichever option you choose, it can be well worth the investment of time and money to keep your insurance rates from skyrocketing.