Stanford has temporarily ceased to be the primary insurer of rental cars used by student groups, dealing new financial worries to the Alternative Spring Break (ASB) program, which relies heavily on rental vehicles for its trips.
Though the University still provides secondary coverage on vehicles, it now requests that renting parties purchase primary insurance from car rental companies as the University reviews its policies.
“The University has yet to reach a final policy,” said Elaine Ray, director of campus communications, speaking on behalf of the Office of Risk Management.
According to Ray, the Office of Risk Management and the ASSU are performing a cost-benefit analysis and examining other universities’ policies on car rental insurance. The Risk Management Office said it will institute a definite policy in the future.
Ray said Stanford still plans to help student groups that rent cars, adding that the first $1 million of any insurance claim will be covered by University general funds.
Nevertheless, ASB financial officer Minh Dan Vuong ‘11 estimates that the University’s decision to remove primary coverage will cost his program an additional $3,000 to $5,000 when the group buys insurance from Enterprise Rent-A-Car in the spring.
Vuong said ASB was informed of the change two weeks ago — but not before submitting special fees requests for this year’s activities last February. ASB requested $58,900 in special fees last year, almost $11,000 of which was budgeted to car rentals.
“We’ll be fine this year,” Vuong said, explaining that ASB has a reserve fund that covers the cost difference. “But if this policy stays in place for the future, is it really cheaper for student groups?”
Jon McConnell, a student affairs officer at the Haas Center and the ASB faculty adviser, noted that the expense of purchasing rental insurance could go up each year, given increases in the cost of coverage and number of trips. Nonetheless, he acknowledged that University administrators have a difficult task on their hands.
“This isn’t the type of thing you want to hear when you’re working on your budget, but I understand the situation Risk Management is in,” McConnell said. “My hope is that the final policy is cost-effective and that we’re not spending more University funds than we were in the first place.”
But for now, further compounding financial worries for ASB is a new rule approved by the ASSU legislature last month that permits student groups to ask only for an inflationary adjustment in their budget in the spring election. Previously, groups’ budgets were allowed to request an up to 10 percent increase each year ahead of the student body vote. Vuong started a petition — personally, not on behalf of ASB, he said — last month to oppose the rule; the petition has garnered some 370 signatures.
Vuong estimates that it will cost $34 to cover each vehicle per day on the Enterprise insurance plan. With two vehicles per trip and approximately 10 trips utilizing rentals, the total cost will be “way beyond inflation,” Vuong said.
This added financial burden appears unavoidable given the structure of ASB.
“The cars are crucial,” Vuong explained. “Our trips go to different cities around the U.S. There’s one trip traveling down the Colorado River Valley. Several trips go to southern California. If it’s possible to use public transportation, such as for our [Washington] D.C. ones, we do that.”
One ASB trip that expects to rack up significant rental miles is called “Medicine at the Margins,” which examines the healthcare of underserved communities in California’s Central Valley. The trip includes stops at agricultural communities such as Salinas and Firebaugh. Co-leader Sarah Hennessy ’12 estimates that her week-long ASB trip will require 15 hours of driving.
“If we didn’t have cars, the trip wouldn’t exist,” Hennessy said. “Public transportation doesn’t exist in many of these areas, which speaks to the rural, isolated nature of these migrant communities. There are different pockets throughout the Central Valley, and our students need to see all of them so they can really understand discrepancies in migrant health.”