Hired & Non-Owned Automobile Liability

Hired & Non-Owned Automobile Liability coverage provides liability insurance protection for the insureds against bodily injury and property damage claims brought against the insureds by third parties or members of the public when vehicles that are not owned by the insured, but are used for official purposes of the insured, are involved in an accident.

What It Covers

For example, a vehicle owned by an employee is used for company business such as when a chapter cook uses his/her car to drive to the store to buy food. The cook is involved in a car accident while running the errand, and the injured party sues the chapter. This would be a Non-Owned automobile claim because the car involved in the accident was not owned by the chapter, but was being used for business purposes and caused property damage to another vehicle and the injured party sued the chapter. The situation would also apply if the cook took a taxi (this would be considered a hired automobile) to travel to the store and the same type of claim occurred. This would be an example of a Hired Automobile claim.

Understanding This Coverage

This coverage does not provide or replace anyone’s personal automobile insurance.

Hired Auto Liability: The insurance coverage generally applies to bodily injury or property damage claims arising out of the use of a “Hired Auto” by an insured or an insured’s employees, but only where the “Hired Auto” is used in an insured’s business.

Non-Owned Auto Liability: The insurance coverage generally applies to bodily injury or property damage claims arising out of the use of a “Non-Owned Auto,” but only where the “Non-Owned Auto” is used in an insured’s business.

Risk Management Recommendations:

  • Increase educational programming stressing personal auto insurance is primary, the fraternity/sorority insurance program does not provide members with any protection for claims that arise from the use of their auto, securing proper auto insurance coverage with appropriate coverage and limits, and the importance of undertaking driving responsibilities in a responsible and safe manner.
  • Establish public transportation only policies for all fraternity/sorority events.
  • Modify or eliminate use of or participation in any safe driver, sober driver, or designated driver programs. At a minimum, written volunteer driver agreements should be utilized.
  • Ensure any person using their car for chapter purposes (e.g. running an errand, picking up food for a recruitment event, etc.) has a valid driver’s license and in-force automobile liability insurance.
  • Require that posted speed limits and all rules of the road be followed.
  • Absolutely forbid any persons that have consumed any alcohol from driving any vehicles.

Disclaimer Notice

This basic information has been prepared as information only. The actual insurance policies are subject to definitions, duties, exclusions, limitations, and various other terms and conditions. This information does not amend, extend, or alter the coverage afforded by the actual insurance policies.

Hired & Non-Owned Auto Exposures include:

  • Undergraduates transporting members and/or guests to or from fraternity/sorority activities
  • Designated or Volunteer Driver, Sober Driver, or “Safe Ride” programs
  • Inter/national board members, staff, or volunteers using their auto on fraternity business
  • Rental of vans or other specialty vehicles (i.e., RVs) to provide group transportation.

Significant claims factors include:

  • Underage drinking (single largest contributor)
  • Inexperienced drivers and being unfamiliar with the operation of a rented vehicle (RVs, vans, etc.)
  • Driver fatigue
  • Vehicle overcrowding and distractions caused by passengers
  • The driver’s or vehicle owner’s insurance limits quickly being exhausted

Questions About H&NOA Coverage?

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