Do you remember the movie “Mary Poppins”? It was one of my childhood favorites!
In the movie, Mary Poppins is hired to care for two upper-class children who have successfully managed to scare away at least a half-dozen nannies in record time. Not so Mary Poppins! She wins the siblings’ hearts, and teaches them (and their father) an important life lesson: Don’t take life too seriously! A little imagination and play go a long way in making everyday chores fun.
Among Mary Poppins’ most exciting activities are her outings: She takes her little proteges into the pictures of a street artist, on a fox hunt, to a ceiling dinner party, and on a walk across the city roofs. Fun stuff! But not from an insurance standpoint…
When it comes to childcare, there are two common option for parents: Daycare or in-home nanny.
Insurance for a daycare mom:
Luckily, one of our clients who runs a daycare called us before using her personal car to take ‘her’ daycare kids to school or on outings…
You see, your personal auto insurance policy does not cover you if you use your car “to transport persons or deliver property for compensation of any kind.”. Whether you use your car to deliver pizza, mail, or newspapers… or whether you transport children (that you’re paid to watch) to and from parks and museums – it comes down to the fact that your car is now an essential and compensated part of your job.
In the case of our nanny, the transport of her daycare kids was incidental to other parts of her job, for which she might receive a single “fee.” But since the legal language in a personal auto policy contract clearly excludes transporting people or products for compensation, and she is being paid for her services which include the transport, she runs the risk of having a claim denied because of the contractual language.
(Note: Shared expense car pools are specifically exempted from this language. So, this exclusion doesn’t impact parents who share driving duty to swimming or dance lessons with another parent, or just reimburse for gasoline expenses.)
Insurance contract language does vary from company to company, and state to state. If you are in a situation where you really need to transport persons or products in your personal vehicle, please be sure to talk to your insurance agent to find out the right solution for you. The best advice may be to purchase a commerical auto policy with high liability limits. Yes, this may cost more, but it would assure that your insurance coverage is there when you need it.
Things are a little bit different if you’re hiring a nanny for the summer.
Insurance for an in-home nanny:
It’s not uncommon for working parents to hire a college student or a young neighbor to watch their kids during summer break. But if driving kids to and from activities is an inherent part of your kids’ summer, be careful about your transportation arrangements!
Never let your nanny drive her own car to transport your children. If transportation is a must, opt to provide a vehicle for your caretaker’s use while getting everybody to where they need to be.
Keep in mind these important steps:
1. If you provide a car for your nanny, be sure to list the vehicle and your nanny as a permissive driver on your insurance policy. (This may require that you temporarily pay higher car insurance rates for a younger operator on your policy. However, you don’t want to risk the alternative: no coverage for your children, nanny or vehicle in case of an accident.)
2. Do not allow your sitter to drive her own car to transport your children. Insurance coverage may not extend. Even if it does, your nanny’s coverage may not be as broad as yours. And since she/he is acting on your behalf, you will also be sued in a serious accident.
3. Be sure to brief your nanny on your safe-driver rules: No texting or talking, required seat belts for everybody, obeying the law, and avoiding distractions can be life-saving basics. You may consider drafting a Safe Driver Contract or even the installation of a tracking device in your car.
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About McClain Insurance Services | www.AutoHomeBoat.com
McClain Insurance Services is an independent insurance agency located in Everett, WA. The agency has represented quality insurance companies (including PEMCO, Safeco, Travelers and Progressive) since 1977.
Independent agents work with you to customize an insurance plan that meets your needs and fits your budget. They can help with all your personal insurance needs: Auto, Home, Renters, Life, Umbrella, Earthquake, Flood, Boat, Motorcycle and RV Insurance.
McClain Insurance Services is a Trusted Choice agency and a member of the Independent Agents Association of America, the Economic Alliance of Snohomish County and the BBB. They are also Charter Members of NSACE – National Society of Agents for Consumer Education. McClain Insurance is a Washington State Corporations for Communities Award Winner and IIABW Agency of the Year 2013.