Automobile Liability Coverage

Liability Program

What is it?

The Employee Auto Liability Program is an extension of the General Liability Trust Fund and was effective on October 1, 1992. Previously, liability coverage for automobiles was excluded in the GLTF.

The program is designed to provide liability protection for state employees while operating state vehicles or personal vehicles in line and scope of their job duties while on official business. All state employees are covered under the program with the exception of educational institutions and boards and employees of the State Docks. The statute excludes local educational institutions while the Program Guidelines exclude State Docks.


Coverage

Coverage provided is a $1,000,000 combined single limit for both bodily injury and property damage per accident regardless of the number of covered employees involved, number of injured parties or extent of property damage.

State-Owned Vehicles. Coverage applies to Covered Employees for the use of state-owned automobiles whether or not the autos are furnished for regular use. Incidental use by Covered Employees is included. Automobiles include private passenger as well as commercial and bus types. Mobile equipment use is excluded, but is covered by the General Liability Trust Fund. Automobiles rented and leased to the State are included.

Vehicles Not State-Owned. Covered employees are protected while using "non-owned" automobiles. The reduced premium charge for these vehicles requires that there will be private insurance or self insurance available in compliance with the Alabama financial responsibility statute. Employee Auto Liability coverage is excess of other available insurance.

Rental Cars. Covered employees are protected while using rental cars on state business in the line and scope of employment.

Class I Drivers. State employees who use their own cars predominantly on state business in the line and scope of employment are known as Class I Drivers. This exposure is much like that of state-owned vehicles, except that the program anticipates that state financial responsibility requirements will be met by the owner. Premium cost is accordingly drastically reduced. Drivers not classed as Class I are Class II.

"Contract" Employees. Certain employees are not subject to the state merit system and work under an agreement with the participating state unit outlining their duties, accountabilities and reporting relationships. It is the intent to cover such employees who are intended to function as state employees.

To avoid controversy as to whether coverage applies to contract employees, the Division of Risk Management requires a written agreement (see Contract Employees Automobile Coverage Validation form) with each affected participating state unit as to whether certain classes of individuals are to be considered employees for the purpose of this coverage. In the absence of a written agreement, the presumption will be that coverage does not apply. The participating state unit should assure that any needed agreement is executed.

Financial Responsibility Requirements. Alabama statutes require drivers to prove financial responsibility for automobile accidents for at least $25,000 per person, $50,000 per accident Bodily Injury and $25,000 Property Damage per accident. The cost structure of the program is predicated upon the fact that employees using their own autos on state business can demonstrate financial responsibility - normally accomplished by private insurance. Proof of liability insurance is not required for state owned vehicles, in accordance with Code of Alabama, 1975, §32-7A-1, et seq.

Medical Payments. This coverage, with per person limit of $1,000, applies to passengers (non-state employees) in covered automobiles on a "no-fault" basis. For this coverage, covered automobiles are private passenger types, law enforcement vehicles, and buses. Also, automobiles operated by Class I drivers are covered. State employees injured on the job are not covered for medical payments. Available state programs for medical benefits would apply to employees.


Program Administration

The Division of Risk Management maintains a complete data base of all state owned/leased vehicles,  along with number of Class I drivers. You will be furnished with a schedule of these each October for the coming fiscal year.

Each agency has designated a "Fleet Coordinator" who will be our central contact for all auto transactions.

As you add and delete vehicles from your fleet, please do the following promptly:

  1. Send us a copy of the Auditor's Property Card (Form #EDM-19419 or other documentation) each time you purchase a vehicle and indicate the 3 digit use class code as listed in your employee automobile liability instructions along with the license tag number and state property number.
  2. Send us a copy of the SD-1 form each time you transfer a vehicle to surplus property. Please include the license tag number and the state property number.

We will issue endorsements monthly reflecting any changes requested in that month.

Certification

You will receive a certification of your vehicles and Class I driver information in the Summer of the year to validate and update for the coming fiscal year. Obviously, an on-going update during the year will make the annual certification process much easier. Your renewal schedule will be published from this certification.

Reporting Automobile Claims

Prior to the inception of the Automobile Liability Program on October 1, 1992, the DORM distributed to each fleet coordinator of each department a claim kit for each State vehicle as well as each Class I driver. These kits offer valuable reference information and are designed to be kept in the glove compartment of the vehicle. If the instructions given in the claim kit are followed, the reporting process will flow smoothly.

The contents of the claim kit include:

Envelope - offers basic steps for the driver to follow in case of an accident. A summary of the Alabama Motor Vehicle Safety Responsibility Act is on the back.

Brochure - again lists the basic steps for the driver to follow in case of an accident but also provides room for the driver to record information which later will be needed to report the claim.

Decal - designed to be placed directly on the dash of the vehicle for quick and easy reference for the driver. The decal repeats important instructions for the driver in the event of an accident.

Automobile Loss Notice - should be completed by the driver and fleet coordinator as soon as possible following an accident. Upon completion, this form should be sent to the DORM office (Our fax number is (334)223-6282). You also have the option of reporting your claim on our website (www.riskmgt.alabama.gov) by entering the information directly onto the form and emailing it to us. In the event of a serious accident or property damage, our claims staff prefers that you call first.

Every auto being used on state business should have in it a claim kit. If you need more kits, call us at (334)223-6146.

Please report the following types of automobile accidents immediately:

  • Any automobile accident in which a State employee is the driver of one or more of the vehicles.
  • Any automobile accident involving damage to the State vehicle if your agency has physical damage coverage.

Call your claims into DORM at (334)223-6146. If the accident occurs after hours and is serious in nature, the driver should report the claim to 1-800-241-1172 for immediate assistance.

DORM will need the following information by phone:

  • Date, time and location of accident
  • Brief description of accident
  • Authority contacted/citation information
  • State driver's vehicle (state or personal)
  • If State vehicle, need VIN# and Tag #
  • If personal vehicle, need State driver's insurance info
  • State driver's name, driver's license # and phone numbers
  • Specific duty being performed at time of accident
  • Property damage of other party (for example, year, make, model of vehicle, extent of damage)
  • Other driver's name and phone numbers
  • Other driver's insurance information
  • Injuries
  • Witnesses

Once the DORM receives the claim, we will forward the information to our claims service who will assign an adjuster if necessary. The adjuster must be able to talk with the driver about the accident, as well as inspect the vehicle if necessary.

If the vehicle involved is not State owned or leased but is the driver's personal car being used on State business, the driver should also report the accident to the insurance company insuring the personal car. In this event, any insurance on the personal vehicle is primary to the State's coverage.

Reminder: coverage for the state employee applies only while that employee is acting in the line and scope of employment. The reason we ask specific duty being performed at time of accident is to determine coverage for the loss.

All claims are currently investigated and defended by our claims service. However, all claims will be reported directly to our office. We will track activity and make certain claims are handled in a timely and effective manner.

Physical Damage Program

The specific coverages are comprehensive (fire, theft, wind, glass breakage, etc.) coverage with a $500 deductible per occurrence and collision coverage with a $500 deductible per occurrence, both regardless of fault.

Coverage is available for all state owned or long term lease vehicles with the exception of buses and trucks with special equipment attached or included as part of the vehicle when purchased new with a gross vehicle weight of 20,000 lbs or less. If coverage is needed for vehicles weighing over 20,000 pounds, call us.

Effective 10/1/98, coverage is afforded for short-term (30 days or less) rental vehicles.

Please notify us immediately of any vehicles (owned or long term leased) you desire coverage for under this program. There is no automatic coverage.

Auto Physical Damage Coverage now includes Non-OEM (Original Equipment Manufacturer) or non-factory installed equipment which involves any custom parts or equipment added for the purpose of enhancing the utility of the auto and operating from its power source. Examples of equipment are: lights, communication equipment, GPS units and computers. This additional coverage is effective October 1, 2014 and is limited to a maximum value of $10,000 per covered auto per accident.

If you have any questions or need further clarification, feel free to contact us.

FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE AUTOMOBILE PROGRAM

Who is covered under the program?

All employees of a participating agency are covered without exception. You must complete a Contract Employee Validation form for all groups of contract employees to be sure there are no "gray" areas.

What is a Class I driver?

An employee who uses a personal vehicle on state business day-in and day-out as if it were an assigned state vehicle and typically receives mileage reimbursement is considered a Class I driver. Many contract employees fit into this category and may or may not receive mileage reimbursement.

What is a Class II driver?

Class II drivers are all remaining drivers other than a Class I. They may be drivers of an assigned State vehicle, motor pool vehicle or any other State vehicle. They also may operate their personal vehicle occasionally on State business. You need not report these.

What happens if we have an accident out of state or while driving a rental vehicle?

Coverage applies in all 50 states and Canada. No coverage is provided in the country of Mexico. Since coverage follows the employee and not the vehicle, coverage would apply in any vehicle. Physical damage coverage is now afforded for short term rental vehicles.

Do I need to keep my "rider" on my personal insurance policy?

We suggest that each individual who drives a state vehicle examine their own personal financial situation. The rider would provide excess coverage over the state's limits of $1,000,000.

Will I be covered 24 hours a day?

Coverage applies any time you are operating a vehicle on official state business in line and scope of your job duties.

Explain Medical Payments coverage.

Medical payments are incidental payments made for injuries sustained by a non-state employee who is a guest passenger in a state vehicle or Class I vehicle. Payments are made regardless of fault in the accident. These payments are offered as an inducement to prevent unnecessary litigation. Medical costs for state employees are handled through the employee medical plan or any workers compensation type programs that a department may have in effect.

If I damage my State vehicle or personal vehicle on State business, will you cover the damages to my vehicle?

The damages to the State vehicle are covered only if the State agency has auto physical damage coverage.

If I run a personal errand during business hours and have an automobile accident, do I have liability protection?

No. The automobile liability program covers the State employee for negligent acts which occur in the line and scope of employment.

What if my accident is minor or if the accident is not my fault, should I report it to DORM?

Yes. Although the accident may appear to be minor or you feel it is not your fault, you need to report it to us. Injuries often arise later from minor accidents.

If I am driving my personal automobile on State business and have an accident, do I report the claim to DORM or my own personal automobile insurance company?

Both. Your own personal insurance would be "primary" coverage in the event of a loss and the State's liability coverage would be excess if you are driving your personal automobile on State business.