Auto Liability Insurance: Hired vs. Non Owned liability
Auto liability insurance may be the last thing you think about when buying, selling or even renting a car, but it could end up being one of the most important decisions you make.
Just ask anyone who’s had to pay hefty legal fees following an accident caused by their vehicle; with so many things to consider in our busy lives, sometimes it’s easy to forget something like auto liability insurance until it’s too late.
Luckily, knowing the difference between hired and non owned auto liability insurance will help prevent this kind of costly mistake from ever happening to you. Find out more after the break!
So here are the auto liability: Hired vs non owned liability
Hired Auto Liability
If you own the car that you use for your business, you should consider purchasing hired auto liability coverage.
This type of insurance protects your business from claims and lawsuits if someone is injured in an auto accident while they are using the vehicle that your company owns and operates.
It also offers protection if the vehicle is damaged during an accident or becomes lost or stolen during a business related trip.
You may be wondering why you would need this type of policy if the business already has comprehensive and collision coverage on its cars.
The answer is that comprehensive and collision coverages only provide protection against physical damage to the car itself, whereas hired auto liability covers other damages such as injury to another person or property damage caused by an accident with one of your vehicles.
In addition, it provides protection for injuries sustained by employees driving one of your company’s vehicles, regardless of who owned it at the time of the accident.
Remember that whether you choose to purchase hired auto liability coverage is ultimately up to you because there is no law requiring small businesses to do so.
However, it does offer some valuable protections for your business and will make sure you don’t forget anything when planning out how much coverage to buy.
What you’ll want to consider before deciding whether or not to get hired auto liability coverage is which kind of operating arrangement your business has (i.e., sole proprietor, partnership).
Businesses with different operating arrangements might want different levels of risk exposure, which means that it might make sense for one to get more coverage than another based on the potential risks involved in their line of work.
For example, a construction company might find it makes sense to purchase more coverage than a hair salon since the former typically needs additional liability protection due to the inherent dangers associated with construction projects.
Another thing that can affect how much coverage your business should have is its revenue level. If you’re just starting out, you’ll probably want less expensive policies until your revenues increase over time then you can always increase them accordingly!
Non Owned Auto Liability
Non owned auto liability insurance protects you if you are driving a car that is not registered to you, or one which you do not own. It also covers any injury that you may cause while driving someone else’s car.
The most common type of non owned auto liability insurance is called Uninsured Motorist Coverage.
This coverage gives the policyholder protection against injuries caused by uninsured drivers and those with inadequate bodily injury coverage limits.
If there is an accident, this would provide the necessary compensation for medical expenses and other costs associated with the accident. read our blog post entitled Non Owned Auto Liability.
Another form of non owned auto liability insurance to consider purchasing is Underinsured Motorist Coverage.
As its name implies, underinsured motorist coverage insures you when you are involved in an accident with a driver who has not purchased adequate insurance or does not have enough to cover all your damages.
Sometimes, another driver might just be at fault because they were speeding and crashed into you. In these cases, underinsured motorist coverage can help you receive financial compensation for lost wages, pain and suffering, as well as emotional distress.
There are many companies out there willing to sell this coverage. You should shop around and get quotes from different providers before deciding on one.
Make sure you understand what the cost will be once you purchase it so that it doesn’t end up costing more than it needs to!
Which One Do You Need?
If you are a business and have employees, then you need to purchase hired auto liability insurance. This type of coverage protects your business from lawsuits if one of your employees gets into an accident while driving a company vehicle that was not owned by the company.
If you are not a business and do not have any employees, then you need non-owned auto liability insurance. You only need this if you lease a car or borrow someone else’s car for more than 30 days.
It also pays for damages done to someone else’s property when you borrow their car .
For example, if you borrow a friend’s car without their permission and get into an accident with it, then they would be able to make a claim against your policy.
Your insurance would cover the cost of the repairs as well as pay out money for pain and suffering.
Some states require businesses to have both types of coverage (such as California), but others do not (such as Ohio). So you’ll want to check with your state Department of Motor Vehicles.