Hired and non-owned auto insurance: what it covers and how it is priced

Why a business with no vehicles still has auto liability

The exposure comes from vehicles you do not own. A sales rep drives to a client in their own car and rear-ends someone. A manager rents a car at an airport for a site visit. An office assistant takes the company’s deposit to the bank. The injured driver can sue the business as well as the person at the wheel, and the business’s other policies are written to stay out of it.

The ISO commercial general liability form CG 00 01 excludes bodily injury or property damage “arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft owned or operated by or rented or loaned to any insured”⁠³. Employees are insureds under a GL policy, so a car an employee is driving is a car “operated by” an insured. The exclusion also blocks claims that blame the business for poor hiring, training or supervision of the driver, if the accident involved such a vehicle⁠³. A businessowners policy contains the same kind of vehicle exclusion; see the BOP page.

Hired and non-owned auto coverage puts that exposure back, for liability only.

Two exposures with different definitions

The coverage has two halves, and insurers price and schedule them separately. The ISO businessowners endorsement BP 04 04 has a separate premium line for each, and it provides only the half for which a premium is shown⁠².

The exclusion in the hired-auto definition stops a business from turning an employee’s car into a “hired” auto by paying the employee for it. That car stays a non-owned auto⁠¹⁠². On a business auto policy, symbol 9 reaches employee-owned cars “only while used in your business or your personal affairs”⁠¹.

Who the coverage protects, and who it does not

HNOA protects the business. Whether it also protects the driver depends on the form.

• Rented and borrowed cars. Under BP 04 04, anyone using a hired auto with your permission is an insured, but the owner or lessor of the car is not⁠². The business auto form also excludes the owner from whom you hire or borrow⁠¹.
• Employees’ own cars. BP 04 04 lists employees, partners and executive officers as insureds for a non-owned auto while it is used in your business. Its list of persons who are not insureds then includes “the owner of a ‘non-owned auto’” and any partner or officer for a car they or their household own⁠². Read together, an employee driving their own car on your errand is not an insured for that car under the endorsement. The business is. The ISO business auto form says the same more directly: your employee is not an insured “if the covered ‘auto’ is owned by that ‘employee’ or a member of his or her household”⁠¹.
• The employee’s own policy pays first. BP 04 04 is “excess over any primary insurance covering the ‘hired auto’ or ‘non-owned auto’”⁠². The business auto form is excess for any covered auto you don’t own⁠¹. The ISO personal auto policy (1994 edition) excludes business use of a vehicle, but that exclusion does not apply to a private passenger car, so an employee’s own policy normally responds to an errand in a sedan⁠⁴. It does exclude use as a public or livery conveyance⁠⁴.

Massachusetts’ residual-market manual prices coverage for employees’ individual liability as a separate charge: 25% on top of the non-ownership premium⁠⁵. In that plan, employees’ own liability is covered only if the business pays for the extension.

What HNOA never pays for

1. The car itself

   The BP 04 04 endorsement covers only bodily injury and property damage liability⁠². Insureon’s description says it “won’t provide coverage if your own car is damaged or stolen”⁠⁸. Damage to a rental car is a physical damage question. On a business auto policy, hired auto physical damage is a separate coverage, and a car rented with a driver doesn’t qualify for it⁠¹.

2. Your employees’ injuries

   BP 04 04 excludes bodily injury to an employee arising out of their employment or their work for your business⁠². Insureon notes that workers’ compensation covers an employee hurt while driving for work⁠⁸. See workers’ compensation.

3. Property you are carrying or looking after

   BP 04 04 excludes damage to property owned or transported by the insured, rented or loaned to it, or in its care, custody or control⁠². Cargo, tools and customer goods in the car are outside the coverage.

4. Vehicles you own

   By definition, neither half reaches an auto you own⁠¹⁠². A business that buys even one van needs commercial auto for it.

Where you buy it

There are three routes, and the choice changes how the premium is shown.

• A BOP endorsement. ISO’s form is BP 04 04, Hired Auto and Non-Owned Auto Liability, which amends the businessowners liability section⁠². Verisk’s 2023 revision of its businessowners program added “new rules and advisory prospective loss costs” for hired and non-owned autos⁠⁷. Insurers that use ISO’s BOP program therefore have an ISO advisory loss cost to start from.
• A general liability endorsement. Insureon says HNOA is “typically added as an endorsement” to a general liability policy or a BOP⁠⁸. We could not confirm a single ISO endorsement number for the GL version. Insurers use their own forms, so read the insured and other-insurance clauses on the one you are offered.
• A business auto policy. A firm with no vehicles of its own can buy a business auto policy scheduled with symbols 8 and 9 only⁠¹. A firm that owns vehicles usually gets the same reach from symbol 1, “any auto”, which covers owned, hired and non-owned vehicles⁠¹. That route is also the one that can add hired auto physical damage⁠¹.

The route also decides which limit applies. On a BOP or GL endorsement, an auto claim draws on the same liability limits as slip-and-falls and other premises claims, because the endorsement extends that policy’s business liability coverage⁠². A business auto policy carries its own auto limit.

How the premium is built

No national price exists for HNOA, and the insurer cost pages we checked publish none (see below). The clearest public view of the rating method is Massachusetts’ residual-market manual. Commonwealth Automobile Reinsurers (CAR) is “the industry operated residual market and statistical agent for motor vehicle insurance” in Massachusetts⁠⁶. Its commercial auto manual sets out the HNOA rules and rates, last revised March 1, 2026⁠⁵. These are rates for the state’s residual market, at the manual’s basic limits of $20,000/$40,000 bodily injury and $5,000 property damage. A voluntary-market insurer in another state will charge different amounts. The method is the useful part.

Non-owned autos: priced by headcount

The premium is read from a table by “the total number of employees of the insured at all locations”⁠⁵. The table counts every employee, not only the ones who drive.

Scroll the table sideways to see every column.

The brackets are wide. A firm with 26 employees pays the same as one with 100. Social service agencies pay an extra $1 per volunteer for bodily injury and $1 for property damage, with minimums of $40 and $10⁠⁵.

Hired autos: priced per $100 of rental cost

For hired autos, you estimate what the business will spend renting cars in the year, then multiply each $100 by the rate: $0.78 for bodily injury and $0.61 for property damage at basic limits⁠⁵. These rates are for excess coverage, where the car’s own insurance pays first. Charges for common or contract carriers regulated by a motor-carrier authority are left out of the cost of hire⁠⁵. The advance premium is the earned premium unless the exposure changes substantially during the term⁠⁵. That is different from GL rated on payroll or sales, where an audit settles the final bill.

A long lease is not treated as a rental. If you lease a vehicle for six months or more and your policy is the primary insurance on it, the manual rates it as though you owned it⁠⁵.

Minimum premiums do most of the work for small firms

A policy that provides only hired auto coverage, only non-ownership coverage, or only the two together carries a minimum premium of $107 for bodily injury and $50 for property damage at basic limits⁠⁵. The hired-auto charge also has its own minimum of $40 for bodily injury and $10 for property damage⁠⁵.

Two worked examples

Both examples are our calculation from the CAR manual’s March 1, 2026 rates⁠⁵. They are HNOA-only policies at the manual’s basic limits. The two public contracts below require $1 million, and the manual’s increased-limit factors would raise both results. We could not read those factors reliably from the published tables, so we have not applied them.

A 12-person consulting firm with $3,000 a year of rental cars.

1. Non-owned autos

   12 employees is class 66010: $40 bodily injury, $10 property damage.

2. Hired autos

   $3,000 ÷ $100 = 30 units. Bodily injury 30 × $0.78 = $23.40, raised to the $40 hired-auto minimum. Property damage 30 × $0.61 = $18.30.

3. Totals before the policy minimum

   Bodily injury $40 + $40 = $80; property damage $10 + $18.30 = $28.30.

4. Policy minimum

   Both are below the HNOA-only minimums, so the premium is $107 + $50 = $157.

At this size the exposure figures barely matter. The firm could double its rental spending without changing the bill.

A 150-employee home care agency with $40,000 a year of rentals.

1. Non-owned autos

   150 employees is class 66030: $332 bodily injury, $122 property damage.

2. Hired autos

   $40,000 ÷ $100 = 400 units. Bodily injury 400 × $0.78 = $312; property damage 400 × $0.61 = $244.

3. Total

   $644 bodily injury + $366 property damage = $1,010, above the minimums.

4. Covering the aides themselves

   Extending non-ownership coverage to employees’ individual liability adds 25% of the non-ownership premium: 0.25 × ($332 + $122) = $113.50 ⁠⁵.

An agency whose aides drive to clients all day has far more non-owned mileage than an office with the same headcount. The manual table does not see that difference. Insureon lists industry, driving records and driver age, location, the number and type of vehicles used, claims history, and limits and deductible as factors in what HNOA costs⁠⁸. See home health care for the rest of that industry’s coverage.

What insurers publish

No insurer or broker cost page we checked gives an HNOA price (checked October 13, 2026). Insureon’s own HNOA cost page says it “does not have exact figures for hired and non-owned auto insurance” (page updated August 21, 2025)⁠¹³. Its coverage page says HNOA is usually an endorsement, so “the cost of HNOA is usually built into your overall premium”, and then lists what it calls average monthly costs for general liability, a BOP and commercial auto for reference⁠⁸. Those are prices for the whole policy, not the HNOA charge. They are on the general liability, BOP and commercial auto pages.

A quote that adds HNOA to a BOP or GL policy should show it as its own line. BP 04 04 has a schedule with an additional premium for each half⁠². If neither the schedule nor the declarations shows a premium for a half, the form says that half isn’t provided⁠².

Contracts that ask for hired and non-owned coverage

Some public contracts ask for auto liability that reaches vehicles the contractor doesn’t own:

• California’s Department of General Services sample clause requires motor vehicle liability of at least $1,000,000 combined single limit per accident that covers “owned, hired, and non-owned motor vehicles”, with the state named as additional insured⁠⁹.
• The Oregon Department of Transportation’s subcontractor exhibit requires auto liability “covering all owned, non-owned, or hired vehicles” at a $1,000,000 combined single limit. A primary policy plus an excess or umbrella policy may make up the amount⁠¹⁰.

Neither text says whether a firm with no owned vehicles can meet the clause with HNOA alone, so ask the contracting office before you sign. If the HNOA limit is below the contract figure, Oregon’s exhibit lets an umbrella or excess policy make up the difference⁠¹⁰; see commercial umbrella.

Price direction

No survey reports HNOA on its own. The policies it rides on were all rising at renewal in mid-2026. In CIAB’s survey of member brokers, commercial auto renewal premiums rose 4.5% on average in the second quarter of 2026⁠¹¹. On a same-policy basis, Ivans measured commercial auto up 4.93% and BOP up 6.16% in that quarter⁠¹². More detail is on the market trends page.

What actually changes the cost

• Headcount brackets, not drivers. Where non-owned autos are priced on total employees, a business pays for staff who never drive⁠⁵. Ask whether the insurer’s rule counts all employees or only drivers.
• Rental spending you report. The hired-auto charge scales with cost of hire, and in the CAR manual, carrier and freight services subject to motor-carrier insurance rules are excluded from it⁠⁵. The manual treats the advance premium as final unless the exposure changes substantially⁠⁵, so the estimate you give at the start largely sets the charge.
• Long leases. A lease of six months or more that your policy insures as primary is rated like an owned vehicle, not as a hire⁠⁵.
• Who carries the first layer. Because HNOA is excess, the employee’s personal auto limit or the rental company’s coverage pays first⁠¹⁠². The ISO personal auto policy covers business use of a private passenger car, but not of a car used as a livery conveyance⁠⁴. HNOA responds only above those layers, so whether employees who drive for work carry their own auto insurance, and at what limits, decides when the business’s coverage is reached.
• Shared limits. On a BOP or GL endorsement, an auto claim uses the same limit as other liability claims⁠². Moving HNOA to a business auto policy, or buying an umbrella, separates them.

Sources

1. 1
   National General Insurance, Business Auto Coverage Form CA 00 01 10 13 (ISO form, forms catalog) Checked 13 Oct 2026 · Back to text ↑
2. 2
   Missouri Farm Bureau Insurance, Hired Auto and Non-Owned Auto Liability, BP 04 04 01 10 (ISO endorsement, policy forms library) Checked 13 Oct 2026 · Back to text ↑
3. 3
   Insurance Services Office (ISO), hosted by Cooper & Scully, Commercial General Liability Coverage Form CG 00 01 04 13 (ISO form, specimen copy) Checked 13 Oct 2026 · Back to text ↑
4. 4
   Maine Bureau of Insurance, Personal Auto Policy PP 00 01 06 94 (ISO form, as filed in Maine) Checked 13 Oct 2026 · Back to text ↑
5. 5
   Commonwealth Automobile Reinsurers (CAR), Commercial Automobile Insurance Manual, rates section (last revision March 1, 2026), Rules 27 and 28 Checked 13 Oct 2026 · Back to text ↑
6. 6
   Commonwealth Automobile Reinsurers (CAR), About CAR Checked 13 Oct 2026 · Back to text ↑
7. 7
   Verisk (ISO), Introducing our most significant update to Verisk's Businessowners program (9/23) Checked 13 Oct 2026 · Back to text ↑
8. 8
   Insureon, Hired and non-owned auto insurance (updated April 21, 2026) Checked 13 Oct 2026 · Back to text ↑
9. 9
   California Department of General Services, Contract Insurance Requirements: when doing business with California state government Checked 13 Oct 2026 · Back to text ↑
10. 10
    Oregon Department of Transportation, Exhibit F: Subcontractor insurance requirements (state fiscal year grants) Checked 13 Oct 2026 · Back to text ↑
11. 11
    The Council of Insurance Agents & Brokers (CIAB), Commercial Property/Casualty Market Index, Q2 2026 Checked 13 Oct 2026 · Back to text ↑
12. 12
    Ivans (Applied Systems), Ivans Index Q2 2026 results released Checked 13 Oct 2026 · Back to text ↑
13. 13
    Insureon, Hired and non-owned auto insurance cost (updated August 21, 2025) Checked 13 Oct 2026 · Back to text ↑

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