Hired and non-owned auto insurance covers damages caused by vehicles that your business uses but does not own. That includes legal fees, medical bills, and property damage.
Hired and non-owned auto insurance usually includes liability coverage, which covers the cost of lawsuits from other people involved in an accident. This coverage can pay for:
Example: While transporting materials to a job site in his personal vehicle, a painter rear-ends another car. The accident is the painter’s fault, so the driver of the other car sues to recoup the cost of repairs and medical bills. The painter’s hired and non-owned auto insurance policy covers the cost of the lawsuit, as well as the settlement or judgment.
Hired and non-owned auto insurance policies usually includes medical payments coverage, which covers the cost of your medical bills. This coverage can pay for:
This coverage is available regardless of who was at fault in the accident.
Example: On the way to a wedding reception, a caterer collides with another vehicle while driving the van she rented to deliver the food. No one is seriously injured, but the caterer and her waiters receive emergency medical treatment at a local hospital. The catering company’s hired and non-owned auto insurance policy steps in and pays the medical bills.
Hired and non-owned auto insurance usually includes protection against vehicle theft and damage. This coverage can pay for damages caused by:
Example: A landscaper rents a pickup for business use, but a strong hailstorm puts dents in the truck's windshield. When the landscaper returns the van, the rental company asks him to pay for the damage to the vehicle. The landscaper’s hired and non-owned auto insurance policy kicks in and covers the cost of replacing the windshield.
Nearly one in eight drivers doesn’t have auto insurance [PDF]. If an uninsured driver collides with your vehicle, they may not be able to pay for the damage they cause. Hired and non-owned auto insurance ensures you won’t pay out of pocket if you’re involved in an accident with an uninsured motorist, according to the Insurance Research Council.
Example: A florist is making a delivery when a driver runs a red light and collides with her vehicle. The other driver forgot to renew his auto insurance policy, so there’s no way for the florist to recoup the cost of repairing her vehicle from him. Instead, her hired and non-owned auto policy ends up paying for the damage caused by the uninsured motorist.
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. It also covers vehicle theft and other types of damage to a business-owned vehicle. Read more about commercial auto insurance coverage.
Hired and non-owned 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 reasons, which includes your commute to and from work.