May 2008, Government Fleet - Feature
University of Minnesota Reduces Insurance Costs and Accidents
By Shelley Mika
Safety is an important issue on college campuses across the country. At the University of Minnesota (U of M), the focus on safety extends to fleet. The university has made a significant difference in the safety of its drivers and others on campus by requiring mandatory driver training and driver’s license checks. As a result of these efforts, the university has also seen dramatic drops in its insurance rates.
Minor Collisions Still An Expense
With more than 900 units in its fleet, the U of M operates a wide variety of vehicles for which it must provide collision and liability insurance. About two-thirds of the fleet is light trucks and vans, but vehicle types range from cars to garbage trucks. U of M fleet vehicles travel diverse terrain as well. Some navigate narrow drives on a densely populated campus, while others are used for fieldwork throughout the state and the country and on rural interstates and highways.
"Much of our driving is done around campus under conditions of high congestion and tight spaces. This is where most of our accidents occur, for example, minor parking lot damage that costs less than $2,000 to fix. Our average collision claim is $1,500," said Bill Roberts, associate director of parking and transportation services. "Noncampus driving is mainly on rural interstates and highways. In my 22 years here, we have never had a fatality in a university vehicle or any injuries that I would categorize as serious."
Even though the University’s claims aren’t bank-breaking, its insurance premiums that remained high. "Every year, I have to fill out a survey from our risk management department that they use to get the quotes. Up until last year, they more or less told us we were out of control even though we did not have many liability claims," said Roberts.
The university is self-insured for collision insurance, and its insurance company provides liability coverage up to $1 million. However, the insurance is purchased on the open market — an expense of $405,000 per year.
With insurance rates becoming a hefty outlay and with the safety of its drivers in mind, the U of M implemented two initiatives. In 2001, the university began a driver safety training program, which was intensified in January 2007. The program was paired with license checks to ensure drivers had valid licenses before operating fleet vehicles. Insurance companies took notice.
"I was amazed at how quickly the insurance companies reacted to our new policy," Roberts said. "Over the last two years, our reduction in collision and liability insurance premiums has been $240,000. The monthly insurance charge per vehicle has gone from $62 to $36."
Bill Roberts (left), associate director of parking and transportation for the University of Minnesota poses with University President Bob Bruininks. Since 2002, the university has trained 4,000 drivers of its 15-passenger vans via a two-hour mandatory training class.