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What is hired and non-owned auto insurance?
Hired and non-owned auto insurance protects your company if you or one of your employees causes damage with a vehicle that your business doesn’t own. That vehicle could be a rented vehicle (that’s the “hired” part of the coverage) or a vehicle that’s owned by an employee or a third-party. Basically, if someone associated with your business causes damage with a non-owned vehicle—and it’s on a business-related activity—hired and non-owned auto coverage will step in to help cover damages.
For example, say your employee is running business errands in their own car and gets into a serious accident, damaging another vehicle and sending the driver to the hospital. Then, after the accident, you discover that the employee had let their car insurance policy lapse. At that point, you and your business would be financially liable for any damages caused by the accident, since the employee was running a business errand. You could be on the hook for tens of thousands of dollars. (And even if the employee had current auto insurance, your business would be liable for any excess damages or lawsuits resulting from the accident. Ouch.)
Does your small business need hired and non-owned auto insurance?
It depends. Do you or your employees ever use vehicles that the business doesn’t own? If you do, you’re vulnerable to a liability lawsuit, and should seriously consider purchasing hired and non-owned auto coverage. (Conveniently, hired and non-owned auto insurance is easy to add to a business owner’s policy bundle—which just about every business should have—so there’s really no reason not to get covered. You can get a rate estimate here.)
What does commercial hired and non-owned auto insurance cover?
Hired and non-owned auto insurance covers the cost of damages, court fees, and legal resources if you or an employee cause damage with a vehicle the company doesn’t own. And when we say “employee,” we actually mean anyone associated with your business—full- or part-time, paid or volunteer.
Now, let’s talk about what this insurance won’t cover. Commercial hired and non-owned auto coverage is a liability policy. It’ll cover the damage that the vehicle causes—and will pay for legal costs and lawyers if you get sued—but it won’t cover damage to the vehicle itself (or any property inside the vehicle at the time of the accident). It also won’t cover your employee’s vehicle during their work commute or for any damage that occurs on a personal errand during business hours.
Long story short: hired and non-owned auto insurance mainly exists to protect your company from a lawsuit, and is definitely not a replacement for auto insurance.
Hired and non-owned auto insurance by state
How much is hired and non-owned insurance coverage?
The premium cost of hired and non-owned auto insurance is based mostly on how many people you employ and on how much money you spend renting vehicles for your business. So your rate will depend on your specific situation, and the best way to figure out what you’d pay is to get an estimate here. (All the questions are easy.)
Common questions about hired and non-owned auto insurance:
No, hired and non-owned auto insurance is not required. But if you or your employees ever drive vehicles that don’t belong to your business, you should strongly consider buying it anyway. It could save you from a massive lawsuit bill (and keep your business afloat).
There are two main elements to hired and non-owned insurance coverage, and the cost for each is determined separately. For “hired” coverage, the price is calculated based on how much money your business spends renting vehicles. In practice, this could mean paying a minimum amount at the start of your policy, and then—at the end of the insurance period—letting your insurer know how much you actually spent on rental vehicles. (At which point, there may be an upward adjustment to your rate.) For “non-owned” coverage, your rate is largely based on how many people you employ—the more potential drivers, the higher the risk. (Makes sense, right?)
All that said, the best way to see what your rate would be is to get an estimate from Huckleberry.
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