Understanding insurance coverages for rented, hired and non-owned vehicles

Personal- and commercial-lines insureds are responsible for injuries or damage when they rent vehicles (or rent out their own vehicles to others), when they are hired to use their vehicles to provide delivery or transportation services and when they borrow or lend their vehicles. In some cases, insureds may agree to terms that may complicate or jeopardize their insurance coverages.

To help insureds understand these agreements and/or how their insurance policies may (or may not) cover them, insurance agents should understand the caveats involved with these different scenarios.

Important questions to consider

Renting

• What kind of vehicle is being rented? A motorized scooter? A car? A tractor trailer?
• Where was the vehicle rented and where is it being used?
• If a rental agreement was signed, was it paid for with a credit card?
• Who is operating the rented vehicle?
• Was the vehicle rented to an individual or a business?
• Is the vehicle a personal auto rented out to another driver?

Vehicles used for employment

• What kind of vehicle is being used for work?
• Is the vehicle used for work a personal auto or does it belong to the employer?
• For what services is the vehicle being used?
• Is the employer a third party (e.g., Uber, Grubhub, DoorDash)?
• Where is the hired vehicle being operated?

Non-owned vehicles

• What kind of vehicle is the non-owned vehicle?
• To whom does the vehicle belong? Does it belong to an employee?
• Is there coverage under the employer’s business auto policy for that employee?
• Who is operating the non-owned vehicle?
• Is the non-owned vehicle being used for personal reasons or business reasons?

You can learn more

These caveats about renting vehicles, using them for employment, or borrowing and lending them may seem complicated. Agents can get a firm grasp on these nuances when they attend Caveat Emptor! Renting Vehicles: Hired and Non-Owned Autos, on Tuesday, April 5, 2022, taught by Steve Lyon, CPCU, CIC, CRM, CRIS, AAI, ARM, AIS, MLIS, AFIS. For more information, to keep up-to-date on the CE-approval process or to register for this class, see the PIA Northeast education schedule.