Auto leaseback agreement for insurance purposes

[Al Iglesias]

What is the name of your state? Fl

In a nutshell: 2 of our eligible 10 employees have personal vehicles they use for our business and we give a monthly car allowance to. We have insurance for the other 5 employees who have company vehicles. We recently added the 2 with personal vechicles to our policy. One of these employees called us and let us know that GMAC (lienholder on this employee's vechicle) is requesting them to be listed as add'l insured. However Hartford has refused. Per our broker: See below:

"I talked to an underwriter at the Hartford and was advised that in order to provide coverage for a vehicle owned by an individual/employee on a company's policy, there must be a written agreement (leaseback agreement) between the employee and the company (insured) stating that the employee is leasing their vehicle to the company (insured). You must have this written agreement in your company file. The employee can then be listed as an additional insured on the company's policy."

Do you guys know anything about a leasback agreement??

Thanks any help would be great. Al

 

[JETX]

What you are describing MAY constitute insurance fraud.
Simply, the car is leased by GMAC to the individual and the agent is wanting you to 'lie' about that and claim that the car is owned by the individual and he is 'leasing' it to the company.

If you do that and the insurance company finds out that your company is not the TRUE owner (pretty easy to find out), then you and company may be denied coverage.

Your better bet would be for the company to 'buy out' their lease if possible and then the vehicle will in fact be company owned.

 

[Al Iglesias]

Auto Insurance

I don't know if this matters, but I am not sure if the vehicle is leased or not.... it may just be a regular loan (have to ask employee). However, that being said I don't think our broker is wanting us to lie. The "insurance company" themselves told the broker directly that we (the employer) just needs an agreement stating that the employee (is what I presume) is lending the auto to the company while employed. The employee had coverage personally but our company plan had much better coverage and we wanted to keep all employees under the same coverage so we swithched it about a month ago. I didn't think it would be a problem. Hopefully I can resolve this soon. Thanks for your input and any other comments woule be greatly appreciated. Al