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What is Non-owned Auto Insurance & Does Your Business Need It?

By July 2, 2025No Comments
non-owned auto insurance

Picture this: You own a catering business. You’re prepping for a big wedding, but you’re short on staff. You ask one of your employees to swing by the bakery to grab custom bread using their personal car. On the way, they rear-end another vehicle.

Even though the car isn’t owned by your business, the errand was work-related. That means your business could be held liable. If the driver’s personal auto policy doesn’t fully cover the damage—or if the injured party sues your company—HNOA insurance can step in to help cover those expenses.

Many businesses rely on cars they don’t own. Maybe it’s a rented van to haul equipment to a job site. Or maybe your employee is using their car to drop off documents to a client or check mail at the post office. In these types of instances, if that vehicle isn’t owned by your business but it’s being used for work, your company could be at risk in the event of an accident.

This is where Hired and Non-Owned Auto Insurance (HNOA) comes into play.


What Is Hired and Non-Owned Auto Insurance?

HNOA insurance is a type of liability coverage that protects your business when employees use rented, leased, borrowed, or personally owned vehicles for work-related tasks.

Let’s break it down:

  • Hired Auto refers to vehicles your business rents, leases, or borrows for business use.
  • Non-Owned Auto applies when employees use their personal vehicles for business purposes.

It’s not a substitute for commercial auto insurance, but it is a critical add-on if your business relies on vehicles it doesn’t own.

What Does HNOA Cover?

This coverage typically includes:

  • Bodily injury liability: If someone is injured in an accident caused by your employee while using a non-owned or hired vehicle for work.
  • Property damage liability: If property (like another car, a building, or other objects) is damaged during a work-related drive.

What it doesn’t cover:

  • Damage to the rented or borrowed vehicle itself
  • Medical costs for your employee or yourself
  • Personal errands, even if they happen during work hours
  • Stolen items from the vehicle
  • Wear and tear on personal or rented vehicles

In short, this is liability protection, not physical damage or collision coverage.


What Counts as a Non-Owned Vehicle?

Any vehicle used for work that your business doesn’t own—typically a personal car driven by an employee. Think sales reps heading to meetings, techs visiting job sites, or assistants running business errands in their own vehicles.


What Counts as a Hired Auto?

A rented, leased, or borrowed vehicle used for business purposes. It could be a rental van to transport gear to an event or a borrowed truck to haul materials to a client.


Why Might Your Business Need HNOA Coverage?

If your team uses non-company vehicles for work—even occasionally—this coverage is worth considering. Without it, a single accident could expose your business to serious legal and financial consequences.

You’re likely a good candidate for HNOA if:

  • Your employees use their own cars for business errands
  • You rent vehicles for work
  • You don’t have a company-owned fleet, but your operations depend on transportation

How Much Does It Cost?

HNOA coverage is relatively inexpensive, especially when compared to the potential costs of an uncovered liability claim. Rates are typically influenced by:

  • How often you rent vehicles
  • The driving history of your employees
  • Type of work and vehicles used
  • Prior claims or incidents

It’s often added to your general liability or business owner’s policy as an endorsement.


Frequently Asked Questions

Is HNOA the same as commercial auto insurance?
No. Commercial auto covers vehicles owned by your business. HNOA covers vehicles not owned by your business but used for it.

Can I just rely on my employee’s personal auto insurance?
Maybe—but it’s risky. Their personal policy may not fully cover business use, and your business could still be held liable. HNOA adds a critical layer of protection.

Is HNOA required by law?
Not necessarily—but many clients or contracts may require you to carry it, especially if you’re subcontracting or working on someone else’s site.

How do I get it?
Talk to your commercial insurance agent (yes, like us!) about adding HNOA to your existing business policy. It’s usually simple and quick to implement.


Final Thought

If your business moves, delivers, meets clients, or runs errands using any vehicles not titled to the company, Hired and Non-Owned Auto Insurance is a smart move. It’s a small cost for peace of mind, and could save you a huge financial headache down the road.

Have questions? We’re here to help you make sure your business is protected—wherever the road takes you.


Need a review of your current policy? Want to see if HNOA is right for your business?
Reach out to the Keslar Insurance team today. We’ll walk you through your options and make sure you’re covered where it counts.