Hired & Non-Owned Auto Insurance

What Is Hired & Non-Owned Auto Insurance?

Hired and non-owned auto insurance covers your business when employees drive vehicles that aren't owned by your company. This includes rental cars, employees' personal vehicles used for business errands, and even borrowed vehicles. If an accident happens while an employee is driving one of these vehicles for work purposes, this coverage protects your business from liability claims. AA Lares Insurance Services helps you understand when this coverage makes sense for your operations.

The "hired" portion covers vehicles your business rents or leases. The "non-owned" portion covers employee-owned vehicles used for business purposes. This coverage typically provides liability protection, which means it pays for injuries or property damage your employee causes to others. It doesn't cover damage to the vehicle being driven or injuries to your employee—those fall under different policies.

Many businesses mistakenly assume their commercial auto policy covers all driving scenarios. It doesn't. If you don't own company vehicles but your employees drive for work, you need this protection. It fills a crucial gap that could otherwise leave your business exposed to significant financial risk.

What Does Hired & Non-Owned Auto Insurance Cover?

This coverage protects your business in specific situations where standard commercial auto policies won't help. Here's what it typically covers:

• Employee personal vehicle accidents: When your employee runs a business errand in their own car and causes an accident, this coverage responds after their personal auto policy limits are exhausted
• Rental car liability: If you rent vehicles for business travel or temporary needs and an accident occurs, your business is protected from liability claims
• Borrowed vehicle incidents: When an employee borrows someone else's vehicle for business purposes and causes an accident, this coverage applies
• Third-party bodily injury: Medical expenses, lost wages, and legal fees when your employee injures someone while driving for business
• Property damage liability: Damage to other people's vehicles or property caused by an employee driving for your business
• Legal defense costs: Attorney fees and court costs if your business gets sued after an employee causes an accident

What this coverage doesn't include is equally important. It won't cover damage to the rental car itself—you'll need physical damage coverage for that. It doesn't cover injuries to your employee who's driving—that's what workers' compensation handles. And it doesn't replace a commercial auto policy if you own vehicles for business use.

The coverage works as excess liability over the driver's personal auto insurance. If your employee causes $150,000 in damages but their personal policy only covers $100,000, your hired and non-owned coverage picks up the remaining $50,000. This protects your business assets from lawsuits seeking damages beyond what the employee's personal policy covers.

How Much Does Hired & Non-Owned Auto Insurance Cost?

Several factors determine what you'll pay for this coverage. Understanding these helps you get accurate quotes and find ways to manage your premium.

The number of employees who drive for business significantly impacts your cost. If you have five employees making occasional trips versus fifty employees driving daily, you'll see vastly different premiums. Insurers want to know how many people are behind the wheel representing your company.

How often your employees drive matters too. Someone making a quick bank deposit once a week presents less risk than employees who spend hours on the road daily meeting clients. The frequency and distance of business driving directly affects your premium. Insurers also consider the types of vehicles being driven and where employees typically drive—urban areas with heavy traffic usually mean higher rates than rural locations.

Your coverage limits play a major role in pricing. Higher limits cost more but provide better protection. Many businesses choose limits that match their general liability policy for consistency. Your industry and claims history also factor into the equation. Some businesses face higher risk profiles than others, and past claims signal future risk to insurers.

The good news is this coverage is typically affordable compared to a full commercial auto policy. Since it's liability-only coverage with no physical damage component, premiums are usually quite reasonable. Many businesses add it as an endorsement to their existing general liability or business owner's policy, which can reduce the overall cost. Working with an independent agent helps you compare quotes from multiple carriers to find competitive rates that fit your budget.

Do I Need Hired & Non-Owned Auto Insurance?

If you don't own company vehicles but employees occasionally drive for business purposes, you probably need this coverage. The key question is whether anyone ever drives a vehicle they don't own for company business.

You definitely need this coverage if employees use their personal vehicles for work tasks—picking up supplies, meeting clients, running to the bank, or making deliveries. Even occasional business driving creates exposure. You also need it if your business rents vehicles for any reason, whether for employee travel, moving equipment, or temporary transportation needs.

Many businesses that need this coverage include consulting firms, real estate agencies, sales organizations, non-profits, healthcare providers who make house calls, and any company where employees travel to client sites. If you reimburse mileage or provide car allowances to employees, that's a clear signal you need this protection.

Some situations where you might not need it: if you own company vehicles that employees drive exclusively, a commercial auto policy covers that. If employees never drive for work purposes—not even to the bank or post office—you may not need it. But think carefully about this. One business errand creates exposure.

California law doesn't specifically require this coverage, but it's often mandated by contracts. If you bid on government contracts or work with large corporations, they frequently require proof of hired and non-owned auto coverage before they'll work with you. Professional licensing boards in some industries also expect you to carry it. Beyond legal and contractual requirements, it's simply smart business protection. Personal auto policies explicitly exclude business use, leaving a dangerous gap if you're not properly insured.

How to Get Hired & Non-Owned Auto Insurance in California

Getting this coverage is straightforward, especially when you work with an experienced agent who understands your business needs. Most insurers offer it as an endorsement to your general liability policy or business owner's policy rather than a standalone product. This makes it convenient to add and often more affordable than purchasing separate coverage.

Start by assessing your exposure. Count how many employees drive for business purposes, estimate how often they drive, and consider what types of errands or trips they make. This information helps insurers quote accurately. You'll also want to review your current insurance policies to see what coverage you already have and identify gaps.

California businesses face unique considerations. The state has high minimum liability limits for auto insurance, and California juries often award substantial damages in accident cases. This means adequate limits are crucial. Many California businesses choose limits of $1 million or higher to adequately protect against the financial consequences of serious accidents.

When comparing quotes, look beyond just the premium. Check the coverage limits, understand the deductible if any, and review exclusions carefully. Ask about bundling discounts if you purchase multiple policies from the same carrier. Independent agents can shop multiple insurers on your behalf, saving you time and often finding better rates than you'd get going directly to a single company.

The application process typically requires basic information about your business operations, employee count, estimated annual mileage for business driving, and your loss history. Most insurers can provide quotes quickly once they have this information. Coverage can often be bound within a day or two once you select a carrier and approve the quote.

Get Your Free Hired & Non-Owned Auto Insurance Quote

Protecting your business from the liability risks of employee driving doesn't have to be complicated or expensive. Hired and non-owned auto insurance provides crucial coverage that fills gaps left by personal auto policies and standard commercial insurance.

AA Lares Insurance Services has helped businesses find the right coverage since 2000. We work with multiple top-rated carriers to compare options and find coverage that matches your specific needs and budget. Whether you need straightforward hired and non-owned coverage or a comprehensive business insurance package, we'll explain your options in plain language and help you make informed decisions.

Ready to protect your business? Contact our team for a free quote today. We'll assess your exposure, answer your questions, and provide quotes from multiple carriers so you can choose the coverage that's right for your business. Don't leave your company vulnerable to liability claims from employee driving—get the protection you need now.