Unable to Afford Insurance, Ala. Schools Return Donated Cars

October 10, 2006

Two county school systems in Alabama have returned nine free cars to Hyundai because they could not afford the insurance the car manufacturer required.

Hyundai, which operates an assembly plant in Montgomery, donated 26 cars to school systems in central Alabama in April for use in driver’s education classes.

The Autauga County school system has returned the five Sonatas it received, and the Elmore County school system has done the same thing with the four it received.

Ken Roberts, chief financial officer for Autauga County’s schools, said the system could not afford the insurance that Hyundai required.

“Our regular insurance providers could not provide the $1 million (per car) umbrella policy that Hyundai wanted, so we sent the cars back,” Roberts said.

Judy Caton, spokeswoman for Elmore County’s schools, said the insurance would have cost about $25,000. “We decided it was in the best interest of our system to return the cars,” she told The Montgomery Advertiser.

Hyundai Motor Manufacturing Alabama required the school systems to indemnify the vehicles — a contract that assures the company could not be held liable for an accident or death.

Since government agencies can’t indemnify, the alternative was to take out insurance, said Tom Salter, spokesman for the Montgomery County schools, which bought insurance for its Hyundai cars.

Hyundai spokesman Carey Christopher said the school systems were made aware of the requirements when they were offered the cars.

“We hoped they would take advantage of the opportunity,” he said.

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