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- HNOA coverage primarily insures vehicles your business doesn’t own, such as rented vehicles or your employees’ personal cars used for business purposes.
- HNOA policies protect your business with liability coverage.
- HNOA is usually added as an endorsement to a business owner’s policy (BOP), general liability policy or commercial auto policy.
Hired and non-owned auto (HNOA) insurance is liability coverage for businesses that use vehicles they don’t own. It covers your business when rented vehicles or employees’ personal cars are used for work, but it does not pay to repair those vehicles.
What is hired and non-owned auto insurance (HNOA)?
HNOA coverage is a type of liability insurance for businesses that use vehicles they don’t own. It protects your business if someone is injured or their property is damaged while you or an employee is using one of the following vehicle types for business purposes:
- Rental vehicles
- Leased vehicles
- Borrowed vehicles
- Employees’ personal vehicles
- Volunteers’ personal vehicles (when applicable)
“HNOA coverage should be purchased by any business whose owners or employees drive cars, trucks or vans that the company does not own, lease or register,” said Mark Friedlander, senior director of media relations at the Insurance Information Institute. “This primarily protects against third-party liability if an accident occurs during business usage of the vehicle.”
HNOA coverage is rarely available as a standalone option. Instead, it’s purchased as an endorsement or rider to an existing commercial auto or business insurance policy.
Hired auto vs. non-owned auto: the two coverages inside one name
HNOA combines two different types of liability coverage. Hired auto coverage protects your business when using rented or borrowed vehicles, while non-owned auto coverage protects your business when employees or volunteers drive their own vehicles for work.
Although they’re usually purchased together, they address different risks.
| Hired auto | Non-owned auto |
|---|---|
| Covers rented, leased or borrowed vehicles used for business | Covers employees’ or volunteers’ personal vehicles used for business |
| Example: Renting a cargo van for a week-long project | Example: An employee drives their own car to a client meeting |
| Protects your business’s liability to others | Protects your business’s liability to others |
| Does not cover damage to the vehicle itself | Does not cover damage to the employee’s vehicle |
One protects your business when you’re temporarily using someone else’s vehicle. The other protects your business when your employees are using vehicles they already own.
Some businesses need only one half. For example:
- A consulting firm whose employees drive their own cars to clients may only need non-owned auto coverage.
- A contractor who regularly rents trucks may primarily need hired auto coverage.
- Many businesses need both.
Commercial auto vs. HNOA: which coverage does what?
Commercial auto insurance covers vehicles your business owns. HNOA covers vehicles your business uses but doesn’t own. Many businesses need one or the other, while some benefit from carrying both.
A commercial auto policy follows vehicles owned and titled by the business. HNOA follows the business’s liability when using vehicles owned by someone else.
A commercial auto policy follows vehicles owned and titled by the business. HNOA follows the business’s liability when using vehicles owned by someone else.
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Do you need HNOA, commercial auto, both or neither?
If your business owns vehicles, you likely need commercial auto insurance. If employees drive their own cars for work or you regularly rent vehicles, you may need HNOA. Some businesses need both, while others may need neither.
Rather than thinking about insurance products first, think about how vehicles are actually used in your business.
Does HNOA cover employees who drive their own cars?
Yes. The non-owned auto portion of HNOA protects your business when employees or volunteers use their personal vehicles for work and cause an accident. However, it generally provides excess liability coverage rather than replacing the employee’s personal auto insurance.
This is one of the most common reasons businesses purchase HNOA coverage.
Imagine an employee drives their own car to deliver products, visit customers or pick up supplies. If they’re involved in an accident while performing work duties, several insurance policies may come into play.
In most cases, the employee’s personal auto insurance responds first because they own the vehicle. HNOA generally acts as excess coverage, meaning it may help protect the business if claims exceed the employee’s policy limits and the business is legally responsible.
Primary vs. excess coverage
Understanding these two terms makes it easier to see how HNOA works.
- Primary coverage pays first after a covered claim.
- Excess coverage applies only after the primary policy has paid up to its limits.
For most businesses, the claim process works like this:
- The employee’s personal auto policy pays first, up to its coverage limits.
- If damages exceed those limits and the business is legally responsible, the non-owned auto portion of HNOA may help cover the remaining liability.
- Neither policy typically pays for damage to the employee’s own vehicle or the employee’s own injuries under HNOA.
Because HNOA usually serves as excess coverage, businesses should encourage employees who regularly drive for work to maintain adequate personal auto insurance. Low liability limits on an employee’s policy can increase the business’s exposure if a serious accident occurs.
It’s also important to remember that HNOA generally does not apply when employees are:
- Driving to and from their normal workplace (commuting)
- Running personal errands
- Using their vehicle for non-business purposes
What hired and non-owned auto insurance doesn’t cover
HNOA is liability-only coverage. It doesn’t pay to repair rented or employee-owned vehicles, cover the driver’s injuries, or apply to personal driving unrelated to work.
Many business owners mistakenly assume HNOA protects every aspect of an accident involving a rented or employee-owned vehicle. Instead, its primary purpose is protecting your business against liability claims from others.
What HNOA generally covers and what it doesn’t
| Typically covered | Typically not covered |
|---|---|
| Liability for injuries to others | Damage to the employee’s personal vehicle |
| Liability for damage to someone else’s property | Damage to a rented vehicle (unless additional coverage is purchased) |
| Legal defense and settlement costs for covered claims | Medical expenses for the employee or driver |
| Liability arising from the covered business driving | Personal errands |
| Ordinary commuting |
How do you add hired and non-owned auto coverage?
Most businesses add HNOA as an endorsement to an existing commercial insurance policy. Standalone HNOA policies are uncommon.
Adding HNOA typically starts with a conversation about how your business uses vehicles—not simply what vehicles you own.
An insurer will usually want to understand:
- Who drives for your business
- Whether employees use personal vehicles
- Whether you rent or lease vehicles
- Whether your business owns any vehicles
- How often vehicles are used for business purposes
Based on those answers, your insurer can help determine whether you need:
- Hired auto coverage
- Non-owned auto coverage
- Both types of coverage
- Commercial auto insurance instead — or in addition
If your business regularly rents vehicles, it’s also a good time to ask whether hired auto physical damage coverage makes sense for your operations.
Remember that HNOA is designed to complement (not replace) commercial auto insurance. Each serves a different purpose depending on who owns the vehicle involved.
Frequently Asked Questions: Hired and non-owned insurance
What is hired and non-owned auto insurance?
Hired and non-owned auto (HNOA) insurance is commercial liability coverage that protects your business when rented vehicles or employees’ personal vehicles are used for work. It covers your business’s liability to others but generally doesn’t pay for damage to the vehicle being driven.
What’s the difference between hired and non-owned auto coverage?
Hired auto coverage applies to vehicles your business rents, leases or borrows. Non-owned auto coverage applies when employees or volunteers use their own vehicles for business purposes. Both focus on protecting your business’s liability to others.
Is non-owned auto coverage primary or excess?
In most situations, non-owned auto coverage is excess coverage. An employee’s personal auto insurance generally pays first and HNOA may help cover liability if damages exceed the employee’s policy limits and your business is legally responsible.
Do I need HNOA if I already have commercial auto insurance?
Possibly. Commercial auto insurance typically covers vehicles your business owns. If employees use their own vehicles for work or you rent vehicles, HNOA may still be necessary to address those exposures.
Does HNOA cover damage to a rented vehicle?
Not by itself. HNOA generally provides liability protection only. If you want coverage for damage to a rented vehicle, ask your insurer about hired auto physical damage coverage.
How much does HNOA cost?
The cost varies depending on your business, how vehicles are used and the coverage limits you choose. Because HNOA is usually added as an endorsement to another commercial insurance policy, it’s best to request a personalized quote from your insurer.
Can I buy HNOA on its own?
Standalone HNOA policies are uncommon. Most businesses purchase HNOA as an endorsement to an existing commercial insurance policy, such as a business owner’s policy, general liability policy, commercial auto policy or another qualifying business policy.
Resources & Methodology
Sources
- III. “Reducing Risks to Your Business Vehicles.” Accessed August 2026.
- III. “Small Business Insurance Basics.” Accessed August 2026.
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