Navigating Commercial Auto Insurance: Understanding Hired, Non-Owned, and Drive Other Car Coverages

• By: Nancy Germond
• December 29, 2025

For business owners, traditional commercial auto policies are essential to protect the owners against claims arising out of the use of the vehicles owned by that company. However, auto liability gaps often arise when employees or owners use vehicles not titled in the company’s name. Two specific endorsements can save the day when business owners use other vehicles they do not own.

We break out one coverage—hired and non-owned (HNOA)—into two different descriptions. However, do not be confused. HNOA is one coverage endorsement. Drive Other Car (DOC) coverage is another endorsement.

1. Hired Auto, Non-Owned Auto

2. Drive Other Car coverage

These critical coverages can help fill the gaps for several different use scenarios that involve temporary or non-company-owned vehicles.

Hired Auto Coverage: When the Business Rents, Borrows or Leases

When a business temporarily uses a vehicle they do not own but control, such as when a business needs a larger vehicle to move some specific equipment, the “hired” part of HNOA saves the day.

• Example: A company rents a box truck for a one-day move, or an employee leases a rental vehicle for a week-long business trip.

• Purpose: This coverage provides liability protection for the business entity if the rented or borrowed vehicle is involved in an at-fault accident during business use.

• Key Consideration: Hired auto coverage typically acts as secondary protection. Depending on the terms of the rental/lease agreement, it may fill gaps after the exhaustion of the rental agency’s basic liability limits or the driver’s personal policy limits. This endorsement does not cover any physical damage to the hired vehicle itself; that requires purchasing a separate physical damage waiver from the rental company or adding a specific physical damage endorsement to the commercial policy

Non-Owned Auto Coverage: Employee Vehicles on the Clock

Non-owned auto coverage is a commonly misunderstood gap filler. It applies exclusively to personal vehicles that employees, partners, or others own and are used temporarily for business purposes.

• Scenario: An employee drives their personal sedan to a client meeting across town, runs a work errand, or makes a delivery using their own vehicle.

• Purpose: This endorsement protects the employer (the business owners) from lawsuits that might arise from an accident involving an employee’s personal vehicle during work activities.

• Key Consideration: The employee’s personal auto policy is always the primary source of coverage. Non-owned auto coverage is not primary auto coverage; it only steps in if the employee’s personal policy limits are insufficient to cover damages or legal fees, or if the personal insurer denies the claim because the employee used the vehicle for a commercial activity (a common exclusion in personal policies). Like hired auto, this coverage does not cover physical damage to the employee’s vehicle.

Drive Other Car (DOC) Coverage: Personal Use for Executives

Drive other car (DOC) coverage fills a very specific, executive-level need. It addresses the unique coverage situation when key personnel—typically business owners or named executives and their spouses—who drive a company-owned vehicle and might not maintain a separate personal auto insurance policy.

• Scenario: An executive whose primary vehicle is a company car needs to borrow a friend’s car for a weekend trip, rents a car for a personal vacation, or uses their spouse’s personal vehicle for non-business reasons.

• Purpose: The DOC endorsement extends the coverages (liability, and often physical damage if included in the primary policy) of the commercial auto policy to that specific individual when they drive a non-owned vehicle for personal, non-business use.

• Key Consideration: Unlike hired and non-owned coverages which address business use, DOC provides personal use coverage for individuals who would otherwise lack coverage when driving a vehicle not listed on the company policy.

Coverage Comparison

As stated above, hired and non-owned coverage is under one endorsement. Drive other car coverage is a separate endorsement.

Potential Gaps in Hired and Non-Owned Coverages

This coverage is a type of liability coverage that applies to auto liability only. Therefore, there are potential issues that can arise that HNOA coverage will not cover. These include the following.

• Damage to the vehicle they are driving.
• Medical bills if an owner or their employee are injured while using a hired or non-owned auto. (Your insured’s workers’ compensation coverage may cover these costs.)
• Property damage to your insured’s business, for example if the hired or non-owned vehicle backs into a shop’s garage door.
• Damages that arise when your client or their employee are not in course and scope of employment while driving the auto, such as deciding to run a personal errand.
• Property stolen from the vehicle.
• Normal wear and tear to the vehicle.

Understanding these two coverages is vital for providing comprehensive auto liability protection. As stated, many agents as part of their best practices will not write commercial auto coverage without writing at least hired and non-owned coverage.

If your agency chooses not to enforce this practice, then it is critical you notify the client in writing that you offered this important coverage and explain how it protects them. Also, attempt to obtain a signed coverage declination form.

Without doing so, you run the risk of an E&O claim down the road if the client has an uncovered loss and claims you never offered or explained the coverage.

Potential Gaps in Drive Other Car Coverage

Drive Other Car Coverage can still present coverage challenges. If the insured hires a new employee and does not add that employee to the policy by endorsement, coverage may not apply. Additionally, if the business owns a vehicle and it is available for use or the insured uses it regularly, coverage may not apply. Finally, any commercial vehicle must be endorsed on the policy.

In conclusion, Hired, Non-Owned, and Drive Other Car Coverages are valuable and often necessary additions to your insured’s portfolio. Understanding the different forms can help you ensure you provide the appropriate coverage to help protect your clients’ risks.

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