Hired and Non-Owned Auto Insurance
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Hired and non-owned auto insurance

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Hired and non-owned auto insurance

This policy provides liability coverage for accidents involving personal, leased, or rental vehicles used by your business.

Why is hired and non-owned auto insurance important?

Commercial auto insurance only covers business-owned vehicles. Hired and non-owned auto insurance (HNOA) protects vehicles that your business uses but doesn’t own, such as rented, leased, and personal vehicles.

Hired and non-owned auto insurance coverage can help you avoid having to pay for auto liability lawsuits on your own. This type of lawsuit can be extremely expensive, especially if someone is injured, and could financially devastate your small business.

Your personal auto policy covers you while driving to and from work, though it might not cover you for work-related accidents that could happen while performing work-related tasks, such as picking up supplies or making deliveries. That means you could be personally liable for non-owned auto liability lawsuits unless you have HNOA insurance coverage.

A small business owner delivering a customer's order in their personal vehicle

HNOA insurance provides coverage for:

  • Personal vehicles used for work
  • Car rentals for a business trip
  • Leased vehicles

What does hired and non-owned auto insurance cover?

HNOA insurance helps cover liability expenses, including lawsuits, related to car accidents that occur in your personal, rented, or leased car that you use for business purposes.

Specifically, HNOA insurance coverage includes:

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Property damage liability

If you or one of your employees gets into an accident with their personal, rented or leased car and it causes physical damage to another vehicle or someone else's property, hired and non-owned vehicle insurance can help cover your legal costs.

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Bodily injury liability

HNOA insurance can help cover the cost of a lawsuit if a personal, rented, or leased vehicle driven for your business injures someone.

How much does hired and non-owned auto insurance cost?

A small business owner calculating their HNOA costs

Your HNOA insurance cost is based on several factors, including:

  • Number of vehicles
  • Vehicle value
  • Level of risk
  • Claims history
  • Employee driving records
  • Policy deductible and limits
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How to get business liability insurance

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How does HNOA insurance work?

Many businesses add hired and non-owned auto coverage to their general liability insurance policy. You can also purchase HNOA insurance separately, but sometimes buying the policies together can lower your insurance rates.

If your small business has higher than average non-owned auto liabilities, you can increase your coverage limit with commercial umbrella insurance. Umbrella insurance increases your maximum policy limit, meaning your insurance company can cover more expensive lawsuits.

Who needs hired and non-owned auto insurance?

Non-owned auto insurance benefits a variety of small business owners that utilize personal, leased or rented vehicles for their business.

You might consider a HNOA insurance policy if:

You or your employees use a personal car

Small businesses often need this coverage without realizing it. You might not think it’s a big deal to occasionally ask employees to use their own vehicles for work errands. But that can lead to auto liability issues.

For example, an employee might be involved in an accident while driving their own car to meet a client. Because personal auto insurance doesn’t cover work driving, the other party could sue to recoup medical expenses or repair costs.

You're an independent contractor or self-employed

If you're an independent contractor or self-employed, your personal auto insurance won't provide protection if you're in an accident while completing a work errand. HNOA insurance would provide the same coverage to you as if you're an employee.

You rent vehicles

If your business rents vehicles, including trucks or vans, HNOA insurance would provide  coverage for your rented automobiles.

For example, if you or an employee has an accident while driving a rental car during a delivery run, HNOA insurance covers the costs of any resulting lawsuits.

What does non-owned auto insurance not cover?

While non-owned auto insurance does provide coverage for several liabilities, it does not provide all the protection that a small business might need.

For instance, a HNOA policy does not cover:

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Auto repairs

Hired and non-owned auto insurance only includes liability protection. It will not pay for vehicle damage or theft.

You should look to your personal auto insurance policy or rental agreement for coverage. However, this option might not be included in a standard policy.

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Business-owned vehicles

Commercial auto insurance, not hired and non-owned auto insurance, helps pay for medical bills and property damage related to an accident in a business-owned vehicle.

A commercial auto policy also covers vehicle theft and other types of damage to a company vehicle. You can often add endorsements to your commercial auto policy, such as drive other car insurance, to expand your coverage.

Read more to learn the difference between commercial auto and non-owned insurance.

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Personal use of vehicles

Hired auto insurance only covers accidents that take place while you’re using a personal or rented vehicle for work purposes. It doesn’t cover accidents that happen while you’re using the vehicle for personal errands, which includes your commute to and from work.

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Recently purchased vehicles

If you purchase a non-business vehicle and it's not yet covered by your HNOA policy, you would be responsible for any liabilities that may occur to the vehicle.

In order to protect any recently purchased non-business vehicles, you should get any auto liability coverage, which offers a temporary extension of your hired and non-owned auto coverage.

Get hired and non-owned auto insurance quotes

Other important policies for small businesses that purchase HNOA insurance

While hired and non-owned auto insurance can be an important part of your risk management plan, you should consider these other small business insurance policies to fully protect your business from financial losses:

General liability insurance: This covers common business risks like customer injury, customer property damage, advertising injury, and copyright infringement. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.

Business owner's policy (BOP): A BOP bundles general liability coverage and commercial property insurance at a discount. It protects against the most common third-party lawsuits and property damage.

Errors and omissions insurance (E&O): Also known as professional liability insurance, E&O insurance protects small businesses against the costs of client lawsuits over unsatisfactory work.

Cyber insurance: Also known as cyber liability insurance, this policy insures against the costs of data breaches and cyberattacks. It covers things like customer notification, credit monitoring, legal fees, and fines.

Workers’ compensation insurance: This is required in most states for businesses with one or more employees. It covers the medical costs and lost wages over work-related injuries and illnesses.

FAQs about hired and non-owned auto insurance

Get answers to frequently asked questions about hired and non-owned auto insurance.

What is the difference between HNOA and personal auto insurance?

Personal auto insurance policies only cover claims related to personal use, including your commute and travel unrelated to work. They have lower limits and usually cost less.

If you’re involved in an accident while driving your personal car for work, your insurance company might refuse your claim. That’s why small business owners who own a car used for work should consider commercial auto insurance or HNOA coverage. If you’re uncertain which policy you need, check with an insurance agent.

Read more about the difference between personal and HNOA insurance.

What are HNOA insurance limits?

HNOA insurance limits can be defined as the maximum amount of money your insurance company will pay. These limits are set when purchasing your HNOA policy and often match the limits of your general liability policy.

Among Insureon policyholders, the average limit is $1 million for auto insurance.

How do I get proof of insurance?

Business owners can usually get proof of insurance online on the same day that they start a small business insurance policy through Insureon.

It can take several weeks for a traditional insurance agency to send a certificate of liability insurance to new customers. That’s an issue for business owners who need immediate proof of insurance.

With Insureon, you can quickly provide proof before a vehicle is used for business purposes. If your bank or lessor requires other proof of insurance, you can contact an agent for more information.

Where can I learn more about hired and non-owned auto insurance?

If you want to learn more about this policy, you can find additional answers in our frequently asked questions about hired and non-owned auto insurance.

If you have any additional questions about coverage or building your risk management plan, you can contact an Insureon agent.

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Cheap commercial auto insurance

Commercial auto insurance is required in most states for small businesses that have company-owned vehicles. However, it can get costly depending on your risk factors, such as your driving history. Learn how you can pay less for auto insurance and still get the protection your business needs.

Updated: February 23, 2024
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