California Property & Casualty Broker-AgentCasualty InsuranceEasy
A construction company in California needs to ensure that its Commercial Auto Policy provides coverage for vehicles rented from a rental agency for short-term projects. Which specific coverage form or endorsement would typically address this need?
- ANon-Owned Auto Coverage
- BHired Auto Coverage
- COwned Autos Only
- DDrive Other Car Coverage
Show answer & explanationAnswer & explanation
Correct answer: B. Hired Auto Coverage
Hired Auto Coverage provides liability coverage for vehicles that the insured leases, hires, or borrows from others, but that are not owned by the insured. This is precisely what is needed for rented vehicles.
Why the other options are wrong
- A. Non-Owned Auto Coverage applies to vehicles not owned, hired, or leased by the insured, but used in connection with the insured's business (e.g., employee's personal vehicle).
- C. This option limits coverage to only vehicles owned by the insured, which is not what is needed for rented vehicles.
- D. Drive Other Car Coverage is typically for individuals (e.g., executives) who do not have their own personal auto insurance but drive company cars and occasionally borrow other vehicles.
Hired Auto Coverage
Hired Auto Coverage in a Commercial Auto Policy provides liability protection for vehicles that an insured business leases, hires, rents, or borrows from others.
- Applies to vehicles not owned by the business.
- Specifically for vehicles rented or leased for business use.
- Often added by endorsement or as part of a broadened coverage form.
Memory trick: Hired means help for rented rides.