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coverage for cars you rent or borrow

What happens when someone from your organization takes to the road? Your policy includes liability coverage for the cars they drive for tasks related to your organization—whether those cars are their own or are leased, hired, rented, or borrowed.

You’ll see the following terms in your policy:

  • Hired autos are those you lease, hire, rent, or borrow—unless they are owned by your employees or members.
  • Non-owned autos include those that your employees or members own, but only while they are driven by a non-owner for business related to the organization.

Both of the above are covered automatically for liability, and your policy includes physical damage coverage, less your deductible. This coverage applies to damage or theft. Therefore, if you rent a vehicle on behalf of your organization, you don’t need to buy the rental company’s additional coverage for physical damage. Do make sure that you rent the vehicle in the organization’s name to use this coverage. For cars rented in an individual’s name, that person’s own coverage applies.

In general, the driver of a non-owned or hired auto is covered if he or she is a named insured acting on behalf of the organization. That excludes the following:

  • The owner or anyone from whom you hire or borrow a covered auto.
  • Your employee, if the covered auto is owned by that employee or a household member of that employee. In this instance, the employee must rely on his or her own auto insurance.
  • Someone who uses your covered auto while selling, servicing, repairing, parking, or storing it.

Furthermore, we cannot support designated driver programs unless they are held in conjunction with official fraternity/sorority events. Nor can we support Sober Sis programs in which chapter members sign up to drive other chapter members who have been drinking. These programs pose significant liability risks to the fraternity/sorority and expose the chapter members who act as designated drivers to liability. (Remember, a chapter member involved in an accident in her own vehicle must rely on her personal automobile insurance.)

Please refer to the claim examples and our Department Position Paper on the topic for more information.

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Have more questions about coverage for rented or borrowed cars? We’d be happy to help!


For common questions related to owned or borrowed cars, and much more, visit our FAQs.

What is your risk management position on 15-passenger vans?
Because of the tremendous risks associated with 15-passenger vans and the driver selection and training requirements, we discourage the use of 15-passenger vans for any activities.
If I drive my personal automobile on fraternity/sorority business, will I be covered by the fraternity/sorority policy?
If I am injured during a sponsored event or at the chapter house, will the organization’s insurance policy pay for my injuries?
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