Think Hired Auto Covers Everything? Think Again
When you rent or lease a truck,
the coverage does not come with the keys. And if you assume it does, you are
probably driving straight into a coverage gap.
If you rent trucks for business,
the coverage needs to match what you already carry.
That means hired auto liability, physical damage, and cargo should mirror your
scheduled units.
Hired auto coverage is not a
shortcut. It has to function like a second version of your core policy.
If it does not, you are wide open.
Whether you are renting a box
truck for a few days or operating an entire fleet with short term leases, hired
autos still need real insurance. That means three things:
- Hired Auto Liability
- Hired Auto Physical Damage
- Hired Auto Cargo
Hired auto coverage was never
meant to be a workaround for listing equipment.
But more and more carriers assume that if they rent, lease, or borrow a unit,
they never have to add it.
That is not how it works.
Let’s break it all down.
What is Hired Auto Coverage?
Hired autos are vehicles you
lease, rent, or borrow for business use. That includes everything from a Ryder
box truck to a Freightliner you pick up from a leasing company or borrow from a
friend.
These coverages are designed for
short term use, typically vehicles or equipment in your possession for less
than 30 days.
Now here is where the problems
start.
Why This Coverage Is Under Fire
If you are renting and swapping
trucks often, you are not alone. But that pattern is raising red flags across
the insurance industry.
Carriers are pulling back. Some
will not offer hired auto coverage at all if they see rentals being used as a
long-term fleet solution. Others will treat the exposure as higher risk and
either surcharge the policy or decline altogether.
Too many rentals sends a message:
- You do not control the maintenance
- You do not control the driver behavior
- You are not making long-term investments in your
fleet
That kind of exposure is harder to
rate and harder to insure.
If your business model includes a
lot of rental usage, it needs to be disclosed early and structured
intentionally, not patched together after a problem.
The Real Risk
Let’s say a rental breaks down. It
is 2AM. Your driver picks up a replacement and keeps moving. You do not call
your agent to make the change. Unless you already have hired auto liability in
place, you are not covered. Not for the liability, not for the physical damage,
and definitely not for the cargo you just moved over.
And those optional coverages at
the rental counter? They are not built for for-hire trucking. You might be able
to buy basic liability or a damage waiver, but:
- They are not tied to your DOT number
- They will not cover your cargo
- They are designed to protect the rental company, not
your business
The Big Three: What You
Actually Need
1. Hired Auto Liability
This protects your business if
your driver causes an accident while operating a rented, leased, or borrowed
vehicle. It is not automatically included in every policy. You may have to ask
for it, and you must confirm it is listed on your trucking policy.
Think:
You buy a truck over the weekend and drive it before calling your agent.
You borrow a friend’s truck to finish a load.
You grab a rental while yours is in the shop.
This is the coverage that protects
your authority when the vehicle is not scheduled.
2. Hired Auto Physical Damage
This pays to repair or replace the
rented truck itself if it gets damaged. Think of it as comp and collision for
short term vehicles you do not own.
Some carriers let you add this as
a blanket endorsement. Others require a stated value for each rental. Either
way, it must be built correctly.
And that expensive physical damage
option at the rental counter? It is not the same. That coverage is designed to
protect the rental company and only covers the truck itself, often at actual
cash value. It will not help you with cleanup, towing, downtime, or business
interruption.
3. Hired Auto Cargo
This is the big one most people
miss. Cargo coverage does not apply to rentals by default.
You must purchase a separate hired
auto cargo endorsement and ask for it to be included. If it is not there, you
have no cargo coverage on that rented truck, even if the rest of your fleet is
fully protected.
We usually see this listed in the
notes or special items section of the COI, below the Workers Comp box. If it is
not shown, it is not active.
If you are using rental units,
your hired auto coverages need to match what you carry on your scheduled
trucks. That is the only way to keep your operation protected. Anything less is
a coverage gap waiting to happen.
What About Certificates?
Your certificate of insurance
should reflect all three coverages if you are using rentals:
- Hired Auto Liability checked in the auto section
- Hired Auto Cargo listed under Motor Truck Cargo or in
the description of operations
- Physical Damage listed near the bottom, with
deductibles and total insured value or stated in the description of
operations
Real Talk: Why This Matters
We see it all the time. A truck
gets rented fast because one breaks down. A dispatcher throws a load on it.
There is no time to review coverage. Then something goes wrong.
If the truck is not scheduled and
hired auto cargo is not purchased, the claim gets denied.
If a COI was filled out wrong, you
are still the one on the hook.
Our Take
Hired auto coverage is not
optional if you are renting trucks for business. It is a critical protection
that has to be built correctly or it does not work.
And with more underwriters pushing
back on frequent rentals, this is not something you want to piece together at
the last minute. If you are running a blended fleet or using rentals regularly,
we can help you build a parallel coverage setup that matches your scheduled
units.
No holes. No confusion. Just real
protection that holds up when it matters.
Need help reviewing your COI or setting up hired auto coverage the right way?
Email us at info@trucku.biz and we will walk you through it.
Disclosure:
This post is for educational
purposes only. It’s not legal advice, insurance advice, or a substitute for
calling your agent. We’re good, but we’re not psychic. Policies vary, laws
change, and courtrooms get weird. Don’t make decisions based solely on something
you read on the internet, unless it’s from us, in writing, with your name on
it.
All opinions are our own and do
not represent the views of any carrier, employer, or underwriting department
that occasionally wishes we were quieter on LinkedIn.
