What is Hired Automobile Coverage?

Hired Auto and Non-Owned Automobile Coverage

Hired Auto and Non-Owned Auto coverages are usually added as an endorsement to a commercial auto policy or sometimes as to an endorsements to a General Lability policy.

What is Hired Automobile Coverage?

three cars with crumpled fenders and one man on his cellphoneHired Auto coverage can either supplement or replace a car rental agency’s liability coverage. But because Hired Auto insurance doesn’t cover physical damage to a rented vehicle, it still makes sense to purchase the rental agency’s physical damage coverage.  (Unless the company has purchased “Hired Physical Damage” but that is for another article.)

The Hired Auto policy’s liability coverage protects the company, but not necessarily the employee renting and driving the vehicle.  Why, there is a disagreement across the nation and in the courts as to whether an employee rented auto is hired by the employer.  While other states have seen it go both ways, it has yet to be addressed in the Texas Appellate court.

What is Non-Owned Automobile Coverage

Non-Owned Auto coverage protects your company should it be sued due to an auto accident while one of your employees is on company business in a personal vehicle. Unlike a personal auto policy, this coverage will not protect you or your employee. As with Hired Auto coverage, this coverage protects the company only and is excess of the driver’s personal auto liability coverage.

Auto liability coverage may be described in your contract in this way: “Contractor shall carry bodily injury, property damage, and automobile contractual liability coverage for owned, hired and non-owned autos with a combined single limit of liability for each accident of not less than $1,000,000.”

Why You Need Hired and Non-Owned Automobile Coverage

If an employee of your company has a serious auto accident in their own vehicle or in a rented vehicle while on company business and their personal insurance is not enough to cover the claim, your company can be held responsible. These claims can be catastrophic and the cost of this insurance is usually less than $200 per year.

Every business owner should seriously consider this coverage.  Call us at 214 -265-1221 to learn more!