The wind was howling across the plains of the Texas Panhandle last Tuesday night. Inside a warm fellowship hall in Amarillo a finance committee meeting was just getting started.
The church is growing. The youth group has doubled in size over the last year and the seniors ministry is looking for ways to travel to community events together. The agenda for the night was simple. They needed to buy a vehicle.
The committee chairperson had found a deal. It was a used fifteen passenger van sitting on a lot on the edge of town. The price was right. It fit the budget. It seemed like the perfect solution to get the students to camp and the seniors to lunch.
But then a deacon raised his hand. He asked if they could just add the van to the pastor's personal auto insurance policy to save money. He assumed that since the church was small they did not need big commercial auto coverage.
That question is terrifying.
If the church gets that answer wrong they are not saving money. They are risking their future.
Churches often make vehicle purchasing decisions based solely on the sticker price. But the cost of the vehicle is only half the equation. The cost to insure that vehicle and the liability concerns it creates can destroy your budget if you choose the wrong type of transport.
You are not just buying a van. You are entering the world of Commercial Auto Insurance. Here is what you need to know before you sign the title.
What Is Church Auto Insurance?
Before you buy a vehicle you must understand what you are paying for.
Many Texas church leaders assume that auto coverage is just a card you keep in the glove box to show the police if you drive a bit fast. But it is actually a complex financial shield. A standard auto insurance policy for a vehicle is split into two main parts.
The first is liability. This is the shield. It pays for the medical bills, property damage, and vehicle repairs of other people if your church staff member causes an accident while driving the church vehicle. It protects the church bank account from a lawsuit. It does not fix your van.
The second part is physical damage coverage. This is often called comp and collision. Collision pays to fix your van or bus if you hit a pole or another car. Comprehensive Insurance pays to fix your van if it is stolen or damaged by a natural disaster. In Amarillo that usually means a hailstorm.
There are options that can often be added like equipment breakdown or roadside assistance if your church is looking to smooth out added expenses that can come from a vehicle. Hired and Non-Owned Auto liability can also be included in this for those looking at total protection.
Because the vehicle is titled to your church which is treated as a business entity, it requires a commercial auto insurance policy. It requires specific Texas Church Insurance that handles the unique risks of transporting people publicly.
Can We Just Put The Van On The Pastor's Personal Policy?
Small churches will sometimes try to title the vehicle in the pastor's name or add it to his personal insurance to avoid commercial rates.
This is a dangerous idea.
Personal policies are designed for a single family. They are not designed for a rotating roster of drivers.
If a youth volunteer or a deacon is driving the van and causes an accident the pastor's personal policy can likely deny the claim. The insurance carrier will look at the roster and see that the driver is not listed on the policy.
The exposure is massive. A personal policy also does not protect the church entity. If a lawsuit is filed the plaintiffs will go after the church assets including the building and the bank accounts. Without a commercial policy in the church name your church has zero defense.
You must keep your business property insurance separate from personal lives. This is a basic concept of good risk management.
Who Is Allowed To Drive And Is State Minimum Coverage Enough?
Once you have the right policy you have to decide who gets the keys.
You cannot just toss the keys to a twenty one year old intern and hope for the best. Commercial insurance companies are generally very strict. They like to require a schedule of approved drivers. If you let an unlisted volunteer with a bad driving record drive you may lose your insurance coverage.
You also need to look at your limits.
If your van rear ends a family sedan on I-40 and injures the driver, $30,000 will not even cover the air ambulance ride. It certainly will not cover the surgery. Once that limit is exhausted the lawyers come after the church to pay the difference.
Do not rely on minimum limits to save a few dollars. You need a combined single limit of at least $500,000. This puts a much larger shield between a lawsuit and your church. If you have significant assets you should also consider Umbrella Coverage to go above that cap.
Is A 15-Passenger Van Actually A Money Saver?
The finance committee in Amarillo liked the van because it was cheap to buy. But they did not look at the long term insurance costs.
Fifteen passenger vans are a liability nightmare for Texas church insurance companies.
Due to high centers of gravity and rollover risks these vans are becoming uninsurable for many carriers. Many insurance companies will refuse to write a new policy for a fifteen passenger van. Others will force you to remove the back row of seats to reduce the weight.
Before you sign the check you need to price the insurance. You might find that a small shuttle bus with dual rear wheels is safer and cheaper to insure in the long run. It is often a better investment for churches and religious organizations that travel frequently.
Building A Complete Wall of Protection
Auto Insurance is just one piece of the puzzle.
A comprehensive review by an experienced church insurance agency can reveal other gaps that need attention. When we look at your auto policy we also look at the rest of your protection.
We ask questions about your church, it's congregation, and your activities so that we can check to make sure you coverage is optimal. We look beyond the auto into all areas that Texas churches need covered.
10 Types of Coverage To Consider Beyond Church Auto Insurance
- Property Coverage
- General Liability Insurance
- Audiovisual Equipment
- Coverage For Special Community Events
- Sexual Abuse and Molestation Insurance
- Directors and Officers (D&O) Insurance
- Cyber Liability Insurance
- Pastoral Professional Liability
- Workers' Compensation Insurance
- Employment Practices Liability
At Insurance For Texans we act as your fleet advisor and your risk manager. We help you vet your drivers. We help you structure your policies to fit your mission and your budget. We ensure that you have the right property and liability coverage for your specific needs.
Don't buy a liability magnet.
Click the button below to get a Commercial Auto Insurance quote that actually protects your ministry.