Hired and non-owned auto coverage: when staff drive their own cars for work
Hired and non-owned auto (HNOA) coverage is liability insurance for a business when a vehicle it does not own is used for work. Hired autos are vehicles the company rents, leases, or borrows. Non-owned autos include employees' own cars used on company business. It protects the company, not the employee, and the non-owned part never pays to repair the car.
On this page
Hired versus non-owned
The two halves cover different vehicles. On a business auto policy they appear as covered auto symbols 8 and 9, and symbol 1, Any Auto, includes both. The definitions below come from the standard business auto coverage form.
| Hired autos (symbol 8) | Non-owned autos (symbol 9) | |
|---|---|---|
| Covers | Autos the company leases, hires, rents, or borrows | Autos the company does not own, lease, hire, rent, or borrow that are used in its business, including cars owned by employees, partners, or LLC members |
| NEMT example | A rented wheelchair van while one of yours is at the body shop | A dispatcher driving her own car to bring a driver a spare key, or an office manager taking deposits to the bank |
| Main limit | Excludes vehicles rented or borrowed from your own employees, partners, members, or their households | Applies only while the car is used in your business |
| Coverage available | Liability, and physical damage when you add it | Liability only |
A policy limited to specifically described autos (symbol 7) covers the vans on its schedule. Under the standard form, a van you buy mid-term is covered only if it replaces a listed van or you already insure every van you own, and you tell the insurer within 30 days. Brokers read these auto boxes on your certificate of insurance.
When a NEMT company needs it
Contracts are the first reason. Several brokers and public buyers write the symbols or vehicle categories into their insurance terms:
| Who | Auto requirement |
|---|---|
| American Logistics | The policy must show Any Auto, or all three of Owned Auto, Hired Auto Only, and Non-owned Autos Only. A policy written for scheduled autos is turned down |
| Louisiana Medicaid (fee-for-service broker) | Either symbols 7, 8, and 9, or symbols 2, 8, and 9, so hired and non-owned coverage is part of both options |
| Paratransit Services, Washington | Auto liability of $1 million per occurrence, combined single limit, when owned, hired, or non-owned vehicles are used |
| Buncombe County, North Carolina (2025 NEMT request for proposals) | Business auto liability on every owned, non-owned, and hired vehicle, at $1 million per occurrence, with uninsured and underinsured motorist coverage |
The second reason is ordinary exposure. Once you have staff, someone will run an errand in a personal car. Employers generally answer for an employee’s negligence on company business. California’s Civil Code section 2338, for example, makes a principal responsible to third persons for an agent’s negligence in the agency’s business. The other case is a rented spare van while one of yours is in the shop. See what to do when a van breaks down for the dispatch side of that.
What it does not cover
HNOA has clear limits:
- The employee’s car. Non-owned coverage is liability only, so repairs to the employee’s vehicle go to their own insurer.
- The employee personally. The standard form does not make your employee an insured while driving a car that employee owns.
- First-dollar claims on non-owned cars. For autos you do not own, the standard form’s other insurance clause makes your coverage excess over any other collectible insurance, so the employee’s policy pays first.
- Riders in personal cars. Personal auto policies commonly exclude driving for pay, and brokers want each vehicle that carries riders on file. Louisiana requires an updated policy showing a vehicle is insured before it is used. Our guide to using a personal vehicle for NEMT covers titling and insurance for that case.
Public programs can differ. Texas’s state risk management program, for example, treats its hired and non-owned coverage as primary for state employees because their personal policies are not considered collectible under state law. Private employers should read their own policy’s other insurance clause with their agent.
For typical premiums and limits, see NEMT insurance cost. NEMT liability shows how HNOA sits alongside general liability and umbrella coverage.
Keeping vehicle coverage straight
Brokers check that every van that carries riders is insured and current. HealthRide’s fleet and credentials registry keeps each vehicle’s insurance and registration dates, sends reminders before they lapse, and flags an expired credential when a trip is assigned.
Frequently asked questions
- Whose insurance pays first when an employee crashes their own car on a work errand?
- The employee's. Under the standard business auto form, coverage for an auto the company does not own is excess over any other collectible insurance, so the employee's personal policy responds first and the company's coverage sits above it. The company policy also does not treat an employee as an insured while driving a car that employee owns, so the employee depends on their own policy.
- Can drivers use HNOA to carry riders in their own cars?
- Do not rely on it. The NAIC notes that personal auto policies commonly exclude driving for pay, and the company's non-owned coverage protects only the company, above whatever the personal policy pays. Brokers also want each vehicle that carries riders documented: Louisiana's broker needs an updated policy showing a vehicle is insured before it is used. Put any car that carries riders on your commercial auto policy.
- Does a rented replacement van need hired auto coverage?
- Not always for liability. The standard business auto form counts a vehicle you do not own, used with its owner's permission as a temporary substitute for an owned covered auto that is out of service for breakdown, repair, servicing, or loss, as a covered auto for liability. Damage to the rental is a separate question, which hired auto physical damage can answer. Insurers use different forms, so confirm both with your agent before the first trip.
