Understanding Auto Insurance: Collision, Comprehensive, Liability, and More

Your ministry recently bought a 15-passenger van to help transport students, senior adults, and others you serve to various activities and events—which means it’s time to shop for auto insurance. How do you know what you need? What types of coverage are most important? Where are some areas where your ministry might be at risk? As you look for auto insurance options that will suit your ministry, here are a few things you should know.

What an Auto Policy Includes

Most auto policies have the following coverages:

Collision: This coverage pays for reimbursement to cover loss from colliding with another vehicle or object, or from overturning the automobile. For example, if your church van rear-ends another vehicle at a stoplight or backs into a tree while leaving camp.

Comprehensive: Physical damage from unexpected losses caused by something other than a collision is covered under comprehensive coverage. Common claims include theft, vandalism, and hail damage. Comprehensive coverage could also pay for damages due to fire, hitting a deer, or tree limbs falling on your vehicle.

Liability: When your vehicle causes loss for another person or organization, liability coverage provides a way to meet your ministry's legal obligations to those your vehicle harmed. Liability coverage may be the most important component of your ministry's auto policy. If your ministry's vehicle causes life-altering bodily injury to another driver, and your ministry is deemed legally responsible, it's this coverage that could pay for that person's medical bills and potential ongoing care. It's important to work with an agent to determine what limits are needed based upon your ministry’s assets and operations.

Uninsured/Underinsured Motorists: This coverage, which is required by law in some states, protects your ministry and pays for damages in the event of a vehicular accident where your church is not at fault, but the other party does not have insurance or does not have enough insurance.

In addition to the standard coverages above, there are other coverages that can be added to your insurance package to safeguard against additional risks. Not all coverage options are included in this article, but these are some scenarios you might face where having certain coverages or endorsements on your policy might save you some stress:

Your vehicle breaks down and needs to be towed.

Having towing coverage on your policy protects you from paying the potentially high costs associated with a tow service.

Your ministry’s vehicle is unavailable for a certain amount of time while undergoing repairs.

If you have rental car coverage on your policy, it can help pay for a rental vehicle.

A staff member is involved in an accident that causes bodily injury and property damage while in a borrowed or rented vehicle.

When non-owned vehicle coverage is included on your policy, it can pay for liability claims of bodily injury and property damage on an excess basis for borrowed or rented short-term vehicles. It also pays legal costs to defend your school and an authorized operator of the non-owned vehicle from claims associated with the operation, use, loading, or unloading of a non-owned vehicle (including a rented vehicle).

Your ministry needs to rent a vehicle while a group of staff members are traveling, and the rental company requires you to have physical damage coverage.

If you have the endorsement for physical damage payments on your Hired and Non-owned Auto policy, it can eliminate the need to purchase physical damage coverage from a rental company.

Your ministry’s 15-passenger van is involved in an accident while transporting students to church camp, leaving several students seriously injured.

Having medical payments coverage on your policy can protect vehicle occupants, other than employees, who may be injured in or through the operation of your ministry's vehicle.

There are many commercial auto coverage options for the different scenarios your ministry might face. Most people know to contact their agent when they buy a new vehicle, but also be sure to talk to your agent when you are:

• Having employees use their own vehicle on behalf of the ministry
• Chartering vehicles with a driver
• Renting vehicles or equipment
• Borrowing a vehicle
• Allowing people or other organizations to borrow your vehicles
• Using a trailer to haul ministry equipment to other locations
• Utilizing recreational or aerial vehicles

There may be coverage available that can help protect your ministry in each of these scenarios. Reach out to your agent to learn about all the options available to you—before you have to deal with a loss.

Questions to Ask Your Agent

As you search for coverage that fits your needs, it’s important to understand what your biggest risks are and how you can protect against losses. Consider discussing the following questions with your agent.

• What type of insurance should I buy considering my vehicle’s specific uses?
• What are good practices for mitigating risks associated with auto liability?
• What's the likely amount of auto coverage that I would need in the event of a total loss?
• What is the potential financial impact of a liability claim for an auto accident where our ministry is responsible?
• Do you have resources that can help us maintain our vehicles properly, screen our drivers, and complete other risk management practices?
• What coverage is needed for employees using their own vehicle to drive on behalf of the organization?
• If I let other organizations or individuals borrow the vehicle, what risks do I need to think about?
• If I borrow or rent a vehicle, do I have coverage for that?

Auto Insurance for Your Ministry

Auto coverage is about more than just your policy; it also includes the care you’re provided during a claim and access to resources that can help you avoid preventable claims. Make sure you are working with a provider that offers educational resources, like articles and checklists, to help your organization navigate risk management challenges.

“For most ministry leaders looking for auto insurance, the main question their search boils down to is, ‘How am I going to keep my staff and congregation safe?’” said Ben Johnson, managing partner of American Church Group of Tennessee. “It’s not just about getting the required coverage. They want to know they’ll be taken care of if and when a claim occurs.”

An auto insurance policy through Brotherhood Mutual can give you confidence that any claim you have will be treated with intentional care. Connect with a ministry-focused agent today to talk about the auto coverages your ministry needs.

Posted August 2023

The information provided in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We encourage you to regularly consult with a local attorney as part of your risk management program.