What Is Hired & Non Owned Vehicle Insurance?
“Hired” vehicles are those that your business may rent, lease, or hire for short-term use. Often, these are rental cars used by employees on business trips, but they could also be leased vehicles if the lease is less than 6 months long (leases longer than 6 months are typically covered under your ordinary commercial auto insurance.)
“Non Owned” vehicles refers to autos your business neither owns nor pays to use – but uses nonetheless. This could mean cars owned by employees when used for a business purpose, a personal auto used by business partners or LLC members to help the business, or a car your CEO borrows from a friend or family member and then uses to complete business tasks.
Can’t These Vehicles Be Covered Some Other Way?
You may wonder if it’s really necessary to add special cover for hired and non owned autos. The short answer is yes. Here’s why.
A rental car company will provide the minimal amount of insurance the law requires, but this is likely not sufficient to cover the kind of risks you face when using vehicles for commercial purposes.
A borrowed vehicle you don’t specifically cover exposes you to great risk. The vehicle owner may have little or no insurance, and his coverage may not include other drivers. Plus, the vehicle owner won’t likely want his/her insurance covering any damages incurred while your company was using the car.
Finally, don’t assume your own personal auto insurance can cover accidents that occur while using your vehicle for business purposes. Most personal auto policies have business use exclusions of some sort, and they generally don’t provide enough cover for commercial purposes anyway.
How Can I Add Hired & Non Owned Auto Coverage?
Most insurers offering commercial auto insurance also offer hired and non owned auto cover to businesses at a very low rate. By contrast, a single accident could easily produce liabilities against your company in the tens of thousands of dollars range or higher.
It is possible to buy hired/non owned vehicle cover solo, but normally, people opt to simply add them to an existing commercial auto policy. Also, you can sometimes add hired and non owned vehicle coverage to a commercial general liability policy if you don’t have or want a commercial auto policy.
To check if your commercial auto policy already covers hired/non-owned autos, look for number 1 (any auto), number 8 (hired autos), and/or number 9 (non owned autos) next to the liability coverage box.
How much hired and non owned auto coverage costs is calculated differently than auto insurance in general. For hired vehicles, it goes by the total expenditures in a year on rented/hired vehicles. For non owned auto cover, it goes by the number of employees you have on average during a year.
To learn more about how hired and non owned auto cover works, or for a free quote, contact Flagler County Insurance Agency today!