Auto Insurance covers more than you think!

Do you drive your own car for work or volunteer activities? If your answer is yes, how does your insurance work in the event of an accident? It could be argued that the only reason you were on the road at that time is because you were representing that work or volunteer organization. So who pays for the damage—you, or the organization?

Payment starts from the auto insurance covering the car that was in the accident. All personal auto insurance policies have the same language: They will pay to defend the driver, the car owners, and anyone else who is liable for the accident. This last category “anyone else who is liable” includes the driver’s employer or volunteer organization. So if Mom is taking kids on a school field trip as a volunteer and she causes an accident, her car insurance will pay to defend her, her family, and the school. If Mom borrows a neighbor’s van so she could fit in more children, the neighbor’s car insurance will pay for the accident. Automobile insurance follows the car, with some exceptions.

If the accident is a small one, that should be the end of the situation. The personal car insurance policy will assume the liability for injury and vehicle damage. However, if the accident is a large one, with one or more people sustaining permanent injuries, the personal car insurance will likely be exhausted. Most states require only a small amount of insurance to pay for another person’s injuries caused by an accident. New York State only requires $25,000 of liability insurance per person injured by a vehicle and some states require even less. If you have your personal car insurance with Merriam, we have most likely insisted you have at least $100,000 of liability insurance for each person who might be injured by your vehicle, with a maximum paid out per accident of $300,000. While $100,000 will cover many accidents, it may not cover the permanent injury of another person. If your insurance company sees that the injuries are serious enough to exhaust your policy, they will write a check for the maximum amount allowed under the policy and leave you, and the organization you were representing on the road, to fend for yourselves.

A well-insured business, church, or non-profit will have additional insurance to defend you and them, should a serious accident exhaust your personal auto insurance. Many times the injured party will see the employer or organization as having “deep pockets” and will sue them. That is why many well-run organizations are particular about who is representing them on the road, even if it is in a personally-owned vehicle.

Rest assured that your car insurance company has your back when it comes to your professional or volunteer work. Do not be surprised if your employer or the organization with whom you volunteer wants a copy of your motor vehicle abstract and proof of your car insurance. They are doing their job to make sure they only allow responsible drivers to represent them on the road.

James Dick, CPCU, AAI

James Dick, CPCU, AAI

Sales Manager
Schenectady, NY

(877) MERRIAM x 219
(877) 637-7426 x 219