Businesses often use vehicles they don’t own. If you rent, lease, or borrow a vehicle for work, Hired and Non-Owned Auto (HNOA) coverage, a type of commercial auto insurance, can protect your business. Find out detailed terms and conditions from your insurance company, for example at https://qic.online/en/car-insurance. HNOA also covers accidents when your employees use their personal vehicles for business, such as making deliveries or meeting clients.
HNOA can help cover claims for property damage or bodily injury if your business is found responsible for an accident involving a rented, leased, or borrowed vehicle, or an employee’s personal vehicle used for business.
To illustrate, consider Jenny, a bakery owner. Busy with customers, she asks her assistant to pick up lunch for the team. En route, the assistant gets into a fender bender with her personal car, damaging the other driver’s vehicle. Jenny is sued. If she has HNOA coverage on her business auto policy, her insurance can help cover the accident’s costs.
HNOA includes two main types of coverage:
- Hired coverage protects your business when you or your employees drive a rented, leased, or borrowed vehicle for business purposes.
- Non-owned auto coverage applies when employees use their personal vehicles for business. It offers additional bodily injury and property damage liability coverage beyond the employee’s personal auto policy.
What are considered non-owned vehicles?
Non-owned vehicles are personal cars not owned or leased by your business. This coverage provides liability protection if one is involved in an accident while being used for business purposes.
For instance, if an employee drives their personal car for work and causes an accident, your non-owned auto coverage — an essential type of insurance for car use in a business context — can help pay for damages to the other vehicle if costs exceed the employee’s personal policy limits. This coverage also helps protect your company from expenses if your business is sued for medical costs.
What is considered a hired auto?
A “hired auto” refers to any vehicle your business rents, leases, or borrows, including cars and trucks. Hired auto insurance covers your liability costs if you or an employee are in an accident while driving such a vehicle for work.
What does hired and non-owned vehicle insurance cover?
HNOA insurance typically covers:
- Bodily injury damage: Helps pay for medical costs, lost income, funeral expenses, and legal/settlement costs for others, up to your policy’s liability limits.
- Property damage: Helps pay for vehicle repairs, replacement costs for damaged property, and legal/settlement expenses for others.
What is not covered by hired and non-owned auto insurance?
It’s important to remember that HNOA insurance is a liability policy for your business. It does not cover:
- Injuries to you or your employees.
- Damage to your business’s own hired or non-owned vehicle.
- Damage to your business property.
- Damages or bodily injury from accidents while driving for personal reasons unrelated to business.
- Property stolen from a hired or non-owned vehicle.
- Normal wear and tear on a hired or non-owned vehicle.
Do you need hired and non-owned auto coverage?
If your business rents or borrows vehicles, or if your employees use their personal vehicles for business purposes, HNOA coverage is crucial. It helps cover property damage and bodily injury claims caused by these vehicles during business operations. Without it, your business could be responsible for significant out-of-pocket expenses.
What Does non-owned auto coverage cost?
The cost of your HNOA coverage depends on several factors, including:
- Claims history: Past claims can increase your premium.
- Vehicle type and value: Higher-value vehicles may result in higher premiums.
- Employee driving history: A history of collisions among employees can raise your premium.
- Frequency and cost of rented vehicles: How often you rent vehicles and the associated costs can impact your premium.
