It's important to weigh all factors when making a decision to borrow or lease ministry vehicles.
State laws mandate that vehicle owners (including owners of rental vehicles) be responsible for damage caused by their vehicles. If the driver is not the owner, and the owner doesn't have adequate insurance, the driver's auto insurance policy may come into play if an accident occurs. When borrowing a vehicle:
Make sure the owner understands that his insurance is responsible for any damage done by the vehicle or to the vehicle.
Obtain information on the owner's insurance (company name, policy number, and policy term) and give this information to the person who will be driving the vehicle.
Make sure drivers understand that their auto insurance may become involved, especially if an accident is their fault.
Verify that the vehicle is in good working order. Discuss any maintenance or operation requirements the owner wants you to follow.
Give the owner the opportunity to approve or disapprove the individual(s) who will operate the vehicle on your behalf.
Agree with the owner or driver on who will be responsible for any comprehensive or collision deductibles that might apply to damage done to the borrowed vehicle.
What primary liability and physical damage (comprehensive and collision) protection does the rental agency provide with the vehicle? The answer to this question will help you determine whether you need to purchase separate coverage for yourself and the vehicle.
When leasing, follow these guidelines:
Rental firms often provide collision coverage subject to a high deductible. If you can't afford to pay the high deductible out of your operating budget, purchase the collision damage waiver coverage as part of your lease agreement.
Occasionally, the leasing agency provides no physical damage coverage. If that's the case, call your Brotherhood agent before picking up the vehicle to ensure you're adequately covered.
Register with the rental agency all people who may operate the vehicle. Don't permit anyone else to operate the vehicle. Doing so may violate the terms of your lease.
Remember, your organization's non-owned vehicle coverage typically operates on an excess basis to all other insurance policies.
Most churches purchase non-owned auto liability coverage as part of their church insurance program. Check your policy to make sure you have this coverage. If your church is sued for an accident that occurs while operating a borrowed or leased vehicle, this coverage works on an excess basis. It's available after the vehicle owner and driver have filed a claim with their insurance company, the primary insurer.
If the vehicle owner and driver don't have adequate coverage, your excess or “back-up” coverage will protect your church. Be aware that it offers no protection, however, for the vehicle owner or for the driver of a borrowed vehicle.
Every insurance policy contains limits, conditions, and exclusions. Read your policy carefully, because it may not respond to all claims for damage.
Thank you for your interest in Brotherhood Mutual. We appreciate the opportunity to provide your church or other ministry with an insurance quote and will reply to your request as soon as possible.
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