We frequently get asked, “Why does our organization have auto coverage, if we don’t own a vehicle?”. And while it’s correct that the organization may not own any vehicles, this endorsement covers the use of borrowed or rented vehicles in your operations.
From time to time, most nonprofit and ministry organizations will use non-owned (borrowed) or rented vehicles. Utilizing borrowed or rented vehicles does come with additional liability exposures, which is why Non-owned and Hired Auto coverage should be included in your insurance plan. This endorsement will help protect the organization by providing several coverages connected to the use of vehicles that are not owned by your ministry or nonprofit.
So, how does this coverage protect your organization? NOHA (Non-owned & Hired Auto) works by covering bodily injury or property damage resulting from the use of non-owned vehicles, which does include rental vehicles. It should also pay for physical damage done, or a total loss, to a rental vehicle. Depending on the needs of the organization, we usually add $45,000 of physical damage, this should cover a total loss of most vehicles rented by the organization. The limits of coverage for both liability and physical damage can vary, so it’s important to review your insurance policy on at least an annual basis to ensure the coverage meets your needs.
When a volunteer runs an errand, or a van is rented to transport your team to a conference, NOHA will protect the organization in case of an accident. Ordinarily, this endorsement is accompanied by other coverages as well; Defense coverage for the driver, personal property replacement for lost or damaged items, and non-owned vehicle deductible reimbursement to cover the owner’s out of pocket expenses if their vehicle is damaged.
A couple of tips to keep in mind – the physical damage is only available on rental vehicles, non-owned (borrowed) vehicle physical damage would be included on the owner’s personal auto insurance. And, when renting a vehicle for your organizations use, be sure to register in the organizations name, not yours personally. This will help with any confusion should it be necessary to file a claim. Lastly, it’s important to have a process for utilizing non-owned vehicles, including a driver screening checklist and a vehicle inspection form, both should be used prior to any use.
If you would like more information about NOHA coverage, or for assistance with putting together a Vehicle Use policy, call us today.