What Hired and Non-Owned Auto Insurance Covers — and Who Actually Needs It
A dispatch service or brokerage that never owns a truck still has auto exposure: employees driving personal cars on company business and rentals on company trips. Hired and non-owned auto liability covers that exposure — but it is not contingent auto liability, not cargo coverage, and not a substitute for a carrier's primary auto policy.
You do not own a truck, but your business lives and dies by trucks. That sentence describes freight brokers, dispatch services, some fleet offices, and any trucking company whose people rent cars, drive personal vehicles on company errands, or send an employee to the airport in a rental. Hired and non-owned auto liability exists for exactly these businesses: it covers the company's liability exposure from vehicles it uses but does not own.
The exposure is real and routinely underestimated. An employee runs to the parts store in their own pickup and causes a serious crash. Your company rented a car for a terminal visit and the driver — on company business — hits a pedestrian. In both cases the injured party's attorney looks past the driver to the deeper pocket: your business. Your general liability policy typically excludes auto exposures, which is where hired and non-owned auto liability steps in.
JackRick Logistics is a truck dispatch service run by Shay Denise, a Freight Strategist and licensed commercial insurance broker based in Hampton Roads, Virginia, working with owner-operators and small fleets since 2022. Dispatch terms are simple and public: a flat 10 percent per load, invoiced every Friday, no retainer, no minimum volume, and no long-term contract — just 30 days' written notice. Coverage varies by carrier, state, and policy language, and this page is general information, not insurance or legal advice. Call (757) 744-2484 or email [email protected] with questions about how these coverages apply to your operation.
'Hired' and 'Non-Owned' Are Two Different Coverages
'Hired auto' covers vehicles your business rents, leases short-term, or borrows — vehicles used in the business but titled to someone else for the duration. The classic example is the rental car on a company trip. In trucking, it also covers the less common but real scenario of a company using a rented box truck or day cab for a short-term need.
'Non-owned auto' covers vehicles your employees own and use for company business — the personal pickup driven to the parts house, the sedan driven to a shipper meeting, the car an office employee uses to run company errands. The business does not own the vehicle, but the business directed the trip, which is what creates the liability exposure.
Most policies package the two together as 'hired and non-owned auto liability,' and most businesses that need one need both. The combined coverage is inexpensive relative to owned-auto policies because the exposure is intermittent — but 'intermittent' does not mean 'nonexistent,' and the one claim that finds the gap pays for the coverage many times over.
Why Dispatchers and Brokers Specifically Need This
A dispatch service or freight brokerage does not own trucks and does not employ drivers — so the instinct is that auto liability cannot touch it. But the business still sends people in cars on company business: to shipper visits, to the bank, to pick up paperwork. Every one of those trips is a non-owned auto exposure. And any business that rents vehicles for company travel has hired-auto exposure.
There is a second, industry-specific reason. Brokers and dispatchers face contingent auto liability theories — claims arguing that the broker is responsible for a carrier's crash because the broker selected, dispatched, or controlled the carrier. Hired and non-owned auto is not the same as contingent auto liability, and it does not answer those claims. Do not confuse the two products: hired/non-owned covers vehicles used in your business operations; contingent auto addresses your exposure from carriers you hire. A broker operation often needs both, and they are sold and underwritten separately.
Landlords and client contracts increasingly require evidence of hired and non-owned auto coverage even from non-asset businesses. If your office lease or a shipper agreement asks for it, the requirement is usually a certificate showing the coverage with modest limits — easy to satisfy once the policy is in place, annoying to scramble for mid-contract.
What It Does Not Cover: Trailers, Cargo, and Your Own Trucks
Hired and non-owned auto liability covers liability to third parties — bodily injury and property damage your business becomes legally responsible for because of a covered auto accident. It does not cover physical damage to the vehicle itself. If your employee totals their own car on a company errand, the non-owned auto policy does not buy them a new car; it responds to the other party's injuries and damages.
It also does not cover the freight. Cargo insurance is a separate product with separate underwriting, and the hired/non-owned auto policy has nothing to say about a damaged load. Nor does it substitute for a motor carrier's primary auto liability: if you own trucks and run them for hire, hired/non-owned auto does not satisfy FMCSA financial responsibility or broker-packet requirements.
Most important for trucking readers: do not confuse hired/non-owned auto with non-owned trailer coverage. They sound alike and have nothing to do with each other. Non-owned trailer physical damage covers damage to someone else's trailer while it is in your care — a real exposure for power-only carriers and anyone pulling customer trailers. Hired/non-owned auto covers liability from vehicles you use but do not own. Different exposure, different policy, different underwriter conversation.
How Underwriters Price It and What Drives the Cost
Underwriters price hired and non-owned auto primarily on headcount and vehicle usage: how many employees drive on company business, how often, and whether the business rents vehicles regularly. A five-person brokerage where two people occasionally drive to shipper visits is a small, clean risk. A dispatch office whose staff drives daily to multiple terminals is a bigger one.
The application will ask about driver screening, personal auto insurance requirements for employees, and whether the business rents vehicles. Having a written policy that employees maintain personal auto insurance with reasonable limits — and verifying it — is the kind of detail that makes underwriting smooth and claims defensible.
Limits are typically modest: many businesses carry hired/non-owned auto at the same limit as their general liability, often one million per occurrence, because contract requirements tend to mirror the GL limit. Higher limits are available and occasionally required by larger shippers. Your broker can advise on the right limit once they understand your operations.
Getting It Set Up Without the Headaches
The easiest path is to add hired and non-owned auto as an endorsement or companion policy to your existing general liability or business owners policy. Standalone hired/non-owned auto policies exist, but for a small brokerage or dispatch office the endorsement route is usually simpler and cheaper, with one renewal date and one agent relationship.
Expect the underwriter to ask for a headcount, a description of vehicle use, and confirmation of your employee personal-auto policy. If your business already has a general liability policy, the addition is often a short supplemental application rather than a full submission — days, not weeks.
After binding, put two administrative habits in place. First, keep certificates of insurance for the coverage current and send them to any landlord or client that requires evidence. Second, document your employee vehicle-use policy in writing and keep it where you can find it. Neither habit costs money; both pay off the first time a contract or a claim asks questions. And keep the standing caveat in mind: coverage varies by carrier and state, and this page is general information, not insurance or legal advice.
Key takeaways
- Hired auto covers rented or borrowed vehicles used in your business; non-owned auto covers employees' personal vehicles used on company business.
- Dispatchers and brokers need it because their people still drive on company errands — and contracts increasingly require the certificate.
- It does not cover the vehicle itself, the freight, or a carrier's trucks — liability to third parties only.
- Do not confuse it with non-owned trailer physical damage: similar names, completely different exposures.
- Adding it as an endorsement to your general liability is usually the simplest, cheapest path.
- Coverage varies by carrier, state, and policy language — this is general information, not insurance or legal advice.
Questions carriers ask
I'm a freight broker with no trucks. Do I really need auto coverage?
If your employees ever drive on company business — to shipper visits, the bank, the airport — or if you rent cars for company travel, yes: those are hired and non-owned auto exposures, and your general liability policy typically excludes auto. The coverage is inexpensive relative to the exposure, and many client contracts and office leases now require evidence of it.
Does hired/non-owned auto cover the trucks my carriers drive?
No. It covers vehicles your business uses but does not own, driven by your people on company business. Your carriers' trucks are covered by their own primary auto liability. The broker-side exposure from a carrier's crash is a contingent auto liability question — a different product addressing a different legal theory.
What's the difference between hired/non-owned auto and non-owned trailer coverage?
They sound alike but address unrelated exposures. Hired/non-owned auto covers your company's liability from vehicles it uses but does not own (rentals, employee cars on company errands). Non-owned trailer physical damage covers damage to someone else's trailer while it is in your care, custody, or control — a power-only carrier exposure. Do not let the similar names put one policy where the other belongs.
Will this satisfy a broker packet's auto liability requirement?
No — and this is a common, expensive misunderstanding. Broker packets that demand auto liability certificates are asking for the motor carrier's primary auto liability, typically one million. Hired/non-owned auto does not satisfy FMCSA financial responsibility or carrier-side contract requirements. It is a business-operations coverage, not a trucking-authority coverage.
Does it cover damage to the employee's own car?
No. Hired and non-owned auto liability responds to third-party bodily injury and property damage your business becomes liable for. Physical damage to the employee's own vehicle stays with the employee's personal auto policy. This is why requiring employees to carry adequate personal auto limits is part of a sound program.