Using Insurance MVRs for Hiring Purposes – A Risky Practice

Posted · Add Comment

When hiring commercial drivers, motor carriers will routinely contact their insurance agent to have drivers added to their business insurance policy. The agency will then run a Motor Vehicle Report (MVR) to determine if the driver meets the underwriting guidelines of the policy.

In some instances, insurance agencies provide the MVRs they ordered to their clients for employment purposes. This practice poses considerable risk to not only the insurance agency but also to the motor carrier, as it may potentially violate consumer privacy regulations.

What You Should Know About the FCRA and MVRs
The federal Fair Credit Reporting Act (FCRA) was enacted in 1970 to protect the privacy of consumer information and to ensure that the information reported by a consumer reporting agency is as accurate as possible.

The FCRA governs many different types of background reports, including motor vehicle records, and has very strict requirements on the legally permissible use of such reports. Under the FCRA, background reports obtained for insurance purposes are governed, in part, by different rules than employment purposed reports.

When a background report is used for employment purposes, the employee must give written permission to the employer to obtain such information.  When an insurance agency orders an MVR for purposes of “underwriting insurance,” as prescribed in FCRA Section 604, they do not need to obtain written permission from the employee to obtain the MVR.

As such, insurance agencies furnishing MVRs to their clients for employment screening purposes may be violating provisions of the FCRA, since express consent was not provided by the employee for the use of their personal information for the purposes of evaluating their fitness for employment. Significant criminal and civil penalties may exist for violating these requirements, including fines and possibly imprisonment.

Increased Enforcement of State Contract Restrictions
Consumer Reporting Agencies (CRAs), including HireRight, obtain Motor Vehicle Records directly from state licensing agencies. As such, CRAs are required to abide by individual state contracts and are audited on a frequent basis to ensure contract compliance.

When ordering a MVR, the requestor must submit a single permissible purpose reason for the request –either for underwriting purposes or for employment decisions. The requestor cannot use an MVR for multiple purposes according to state contracts. MVRs may not be used beyond the purpose for which they were ordered and cannot be sold or given to parties outside the ordering company.

Varied Information on MVRs Based on Permissible Purpose
In some states there are significant differences in the information provided on MVRs based on the permissible purpose. MVRs used for employment purposes may contain additional years of information beyond the standard timeframe. The violations found on MVRs will differ according to the permissible purpose as well.

Generally, the insurance MVR will have violations suppressed. Thus an employer using an insurance MVR to make employment decisions may be basing those decisions on incomplete information, which could result in the employer being held accountable for their employee’s actions in cases of negligent hiring. This is especially relevant if the employee is being considered for a job with driving responsibilities.

Some insurance MVRs do not contain medical certification information. The MVR is not FMCSA compliant if it does not include the medical certification. Most states are currently posting the basic, minimal medical certification information on MVRs, which consists of the driver’s medical status and the expiration date of the medical examiner’s certificate. The majority of states post the complete medical certification information, and all states are working towards full medical certification inclusion.

In today’s generally litigious climate, including the spike in class action litigation under the FCRA, employers need to understand the FCRA requirements placed on them. Substantial criminal and civil penalties may exist for violating the FCRA, so check with your legal counsel for additional guidance.

Free Report: Fair Credit Reporting Act (FCRA) Basics
Free background screening report
Are you FCRA compliant? Find out by downloading:

Fair Credit Reporting Act (FCRA) Basics

Download Now

Steven Spencer

Steven is the managing director for the transportation and heath care business lines at HireRight. He brings more than 25 years of experience in business development, operations, sales and product innovation. Steven joined HireRight in 1999, where he created the account management program for the transportation division and was responsible for building deeper customer relationships and driving revenue growth.

More Posts

Follow Me:



The HireRight Blog is provided for informational purposes only. It is not intended to be comprehensive, and is not a substitute for and should not be construed as legal advice. HireRight does not warrant any statements in the HireRight Blog. Any statutes or laws cited herein should be read in their entirety. You should direct to your own experienced legal counsel questions involving your organization’s compliance with or interpretation or application of laws or regulations and any additional legal requirements that may apply.