Car Insurance for a Nanny (or Other Domestic Employees)
January 21, 2020
Do you need to buy insurance for a nanny? The short answer is yes, if she works for your family at least 16 hours per week. Massachusetts considers you an employer in this situation, which means you need to purchase workers’ compensation insurance (a.k.a, nanny insurance), to cover any injuries or illnesses your domestic employee might incur while on the job.
But what about car insurance for a nanny?
Most families rely on their full-time caregivers to do at least some driving, as part of regular job duties. This could include picking up children from school, driving them to activities, or handling grocery shopping and other errands. Whether your nanny uses her own car, a household car that you own, or both, you will need to address a few key car insurance issues. Here’s how it works:
Insurance for a Nanny Who Drives Your Car
If your nanny regularly uses your car while on the job, you’ll need to add her to your auto policy. Contact your insurance agent to learn more about how this might affect your rate. (NOTE: less experienced drivers or those with poor driving records will be more expensive to add.)
This is another reason it makes sense to include a Motor Vehicle Report in any background checks you conduct before hiring. Ask prospective nannies to submit a current copy of their driving record. Applicants can order driving records online, via www.dmv.org .
Be sure you are following all Massachusetts’ fair employment laws, when asking questions about personal history or making hiring decisions based on background. Take a moment to review the Massachusetts Domestic Worker Bill of Rights, which outlines the answers to important questions about pay rate, benefits, work schedule, termination, workers’ comp, and more. You may also wish to contact the Attorney General’s Fair Labor Division for answers about background checks when hiring domestic employees: (617) 727-3465 or (617) 727-4765 TTY.
Insurance for a Nanny Who Drives Her Own Car
If your nanny is going to drive her own car while caring for your children, insurance is a bit trickier. Firstly, you’ll want to make sure your employee has a safe car and adequate MA car insurance limits—including the recommended liability limits (more on this below) and coverage for uninsured/under-insured motorists. Secondly, you’ll want to ask an agent about any exposures that exist beyond your nanny’s car insurance. Why? Because in some cases, when an employee causes a serious car accident while on the job, injured parties have successfully named employers in the resulting lawsuits—looking to claim further damages from someone with deeper pockets. That means you.
Make sure your nanny informs her carrier that she will be using the car as part of her job with you, which is technically a “business purpose.” Some carriers may require that she purchase a commercial auto policy. Other companies may offer a business class/rate on your nanny’s existing personal policy – a much more cost-effective option.
As part of your hiring agreement, include your right to regularly review the nanny’s driving history, vehicle maintenance, and up-to-date insurance information.
Car Insurance Limits for Your Nanny
Every situation is different, so we can’t give you advice without knowing more about yours. That said, your nanny would *probably be wise to maintain liability limits of $250K/$500K. Here’s more info to answer the question: how much car insurance do I need?
Ask your insurance agent if/how your personal auto policy (PAP) might provide a legal defense or cover any judgments in excess of your employee’s limits. We recommend getting a copy of this answer and keeping it on file.
Additionally, you might consider purchasing a personal umbrella policy that could provide coverage on top of your PAP. Do you need umbrella insurance?
Insurance Needed Not Just for Nannies
Nannies aren’t the only domestic employees who may affect your insurance needs. Senior caregivers, housekeepers, gardeners, and others may bring new auto insurance or workers’ comp insurance considerations into your household. Before you hire someone to take on one of these roles, call your agent. If you don’t yet have a dedicated, local insurance agent, our team of experts is always glad to help: 508.339.2951.