Whose Car Is It Anyway? Why HNOA Insurance Matters
Author: Michelle McArthur
Table of Contents
Many businesses do not own vehicles, but that doesn’t mean they don’t need auto coverage, right? Right! So, what does HNOA stand for? Hired/Non-Owned Auto. This is commercial auto coverage for bodily injury and property damage caused by vehicles the business does not own but either rents (hired) or that are personally owned by employees and used for work (non-owned).
Why Do Companies Need HNOA Insurance?
Let’s look at some sample scenarios:
- Office assistant uses a personal vehicle to pick up office supplies and gets into an accident. This is a non-owned vehicle being used for business purposes.
- A company rents a van to deliver products to a customer and gets into an accident. The vehicle was hired (rented) and used for business purposes.
- A salesman drives a personal vehicle to visit a client and gets into an accident. This is a non-owned vehicle used for business purposes.
HNOA does not cover physical damage to the hired or non-owned vehicle itself, it only covers liability to others. This coverage is either added to the insured’s general liability policy or included in the insured’s commercial auto policy, depending on the insurer and policy structure. The typical limit is $1 million.
How do you get HNOA Insurance for the hired or non-owned vehicle itself?
- For the hired auto, you can purchase “Hired Auto Physical Damage Coverage” as an addition to the commercial auto policy.
- For non-owned, physical damage coverage is generally not available under a business policy. Instead, it would be covered under the owner’s personal auto policy. Which makes sense, right? A business can’t insure something they don’t own or rent.
Note! This coverage does not cover commuting or personal use of vehicles. (I know, wouldn’t that be cool if it did!)
It’s actually common for small businesses to overlook the need for HNOA insurance until a claim arises. Think about it: an employee causes a serious accident in their personal vehicle running a quick errand. The injured third party sues the business, not the employee since businesses are typically perceived as having “deep pockets.”
Also worth noting, rideshare and delivery drivers are not covered under HNOA. Due to the volume and risk, these types of operations require specialized commercial auto coverage.
If a business relies on employees using personal or rented vehicles, HNOA coverage is a simple but critical layer of protection.
Even if it’s a rare scenario, it’s one of those “better to have it and not need it” coverages!
Until next time!
MM
About the Author:
Michelle McArthur
Senior Program Executive, Complex Commercial
Michelle is a licensed agent and has a wealth of experience spanning over two decades. She began her career in the outsourced tracking space, where she worked from 2001 to 2019, including a notable tenure with HUB in 2015 and 2016. She then transitioned to the commercial retail insurance sector for several years, serving as an Account Executive at Lockton then Gallager, specializing in real estate clients.
In her current role as Senior Program Executive, Michelle oversees complex commercial accounts and services with a focus on account management, commercial products, and supporting operations. Her diverse background enables her to effectively navigate the intricacies of the commercial insurance landscape.