Hired and non-owned auto insurance

Commercial auto insurance only covers business-owned vehicles. Hired and non-owned auto insurance (HNOA) covers 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 accident 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, but it won't cover accidents that happen while performing work-related tasks. For instance, you might drive your own car to meet clients, pick up supplies, or make deliveries.

Without HNOA coverage, you could end up responsible for legal fees from an accident, including a costly court-ordered judgment or settlement.

Hired and non-owned auto insurance provides financial protection if you get into an accident in your own vehicle, an employee vehicle, or a hired auto used for business.

Specifically, HNOA insurance covers:

Most small business owners add hired and non-owned auto coverage to their general liability insurance or their commercial auto insurance policy as an endorsement, which helps save money on coverage. However, some carriers sell HNOA as a separate policy.

If your business has higher-than-average liabilities, such as a fleet of non-owned vehicles, you can increase your coverage limits with commercial umbrella insurance. Umbrella insurance boosts your maximum policy limits, meaning your insurance company will cover more expensive lawsuits.

Hired and non-owned auto insurance benefits a wide range of small business owners who depend on personal, leased, or rented vehicles to conduct business.

You might consider a HNOA insurance policy if:

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 if they get into a car accident, their personal auto insurance provider might deny the claim.

For example, an employee rear-ends an SUV while driving their own car to meet a client. The other party sues to recoup their medical expenses, but the employee's personal insurer denies the claim since the accident happened while they were driving for work.

If you're an independent contractor or otherwise self-employed, your personal auto insurance won't provide protection for work-related auto accidents. HNOA insurance would provide coverage when you need to drive your own vehicle for work purposes.

If your business rents trucks, vans, or other vehicles, or operates under a trucking contract, HNOA insurance would provide coverage for your rented vehicles.

For example, if you or an employee is involved in an accident while making a delivery in a rental truck, HNOA insurance would cover the cost of a lawsuit or any damages.

While hired and non-owned auto insurance does provide coverage for bodily injury and property damage liabilities, it does not provide all the protection that a small business might need.

For instance, an HNOA policy does not cover:

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 deny 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.

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

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

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

With Insureon, you can typically download a COI the same day that you apply for quotes, so you can send proof of insurance to banks and lessors, and use your vehicle right away.

Small business owners can extend their HNOA coverage to subcontractors and other individuals with additional insured endorsements.

For example, a business hires a contingent worker through a staffing agency to assist with a temporary employee shortage. The business could add an endorsement to their HNOA policy that would allow the temporary employee to drive their own car or a rental car for work for a fixed period of time.

A temporary substitute automobile is a vehicle that is used while your insured car is unavailable for a short period of time. A common example of this is when an auto repair shop provides a loaner vehicle for customers who are waiting for their own car to be repaired.

If you're on the road with a temporary vehicle while using it for business purposes, your HNOA and personal auto policy would not provide coverage. Any expenses from an accident would be your responsibility.

If you plan on regularly using temporary substitute vehicles, you may want to consider a business auto policy (BAP) which covers all vehicles used by your business and your employees, including temporary substitutes.

You can find additional information about this policy in our FAQs about hired and non-owned auto insurance.

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