Hired and Non-Owned Auto Insurance in Massachusetts
If you are running a business in Massachusetts that is making use of a vehicle that doesn’t belong to you and want to know if you need borrowed, non-owned or hired auto insurance, we are going to try in this article to help answer this important question.
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There is no simple answer to whether the type of vehicle you’re using in Massachusetts, when it’s borrowed, hired or rented, has a legal requirement for mandatory non-owned auto insurance.
You should make sure when signing the contract for use of the vehicle that the necessary insurance is either included, or that you have obtained the required cover, before you take the vehicle out onto the roads.
If you own your car, you’re probably used to paying insurance premiums every year, just in case something unexpected happens while you’re on the road. But if you hire a van or truck and you don’t think about insuring it – until something goes wrong and your insurance company denies your claim because it wasn’t covered in your rental agreement.
The same goes if you borrow a friend or family member’s vehicle; chances are they didn’t consider how far their private insurance policy covers commercial use of the vehicle.
Don’t be that driver! Read this article to understand how driving a hired vehicle without insurance coverage in Massachusetts puts you at risk of fines and damages from an accident that could wipe out all the savings in your bank.
If you lease or borrow vehicles to transport customers or move products to and from your place of business in Massachusetts, you may need liability coverage. And if you’re an independent contractor or sole proprietor who uses their vehicle but doesn’t own it outright, you also need liability coverage.
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It’s worth noting that drivers who provide transportation services in Massachusetts are generally required by law to have liability coverage before they can pick up passengers or offer transportation services under any circumstances.
Liability coverage protects drivers against lawsuits arising from bodily injury or property damage caused by an accident involving their vehicle if it’s used for business purposes.
Do you have liability coverage for hired, borrowed or unowned vehicles in Massachusetts?
You probably don’t have enough coverage if you’re like 80% of Americans. Most drivers think their auto insurance policy covers any vehicle they’re driving – but it doesn’t.
Suppose you hire a car or borrow one from someone else. In that case, you need an endorsement (called Non-Owned Automobile Liability) to cover you when you drive someone else’s car.
In Massachusetts, liability coverage is required for hired, borrowed or unowned vehicles. Drivers must also have insurance against collision or other damage they may cause while operating these vehicles. This coverage may also protect you against liability claims if you hit someone while driving someone else’s car, motorcycle or RV.
Some drivers may believe they only need insurance against collision damage when they own their own vehicle, but that’s not always true. So make sure you know what you need before driving off in someone else’s car or renting one!
Sample – Pizza delivery service in Massachusetts
One of the easiest-to-understand situations that explain most of the facts dealing with insurance for non-owned and hired auto insurance is the example provided by a commercial pizza delivery service. There are two possible alternative modes of operation:
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- Owner of the pizza shop accepting orders and doing the deliveries
- Owner of the pizza shop contracts with third parties to pick up and deliver
These present very different scenarios when it comes to insurance for non-owned or hired vehicles:
All of the liability and risk associated with the vehicle on the roads of Massachusetts belongs to you.
Using a car or truck for your pizza delivery activity in Massachusetts requires you to take out insurance to cover all possible risks. You need liability coverage to protect yourself and the business against any accidents. Still, not everyone realizes that hired vehicles have different requirements than their own personal cars.
In Massachusetts, hired vehicles require the lessor (person or company that owns and is offering use of the vehicle) as well as the lessee (person who hires it) to be insured for liability coverage at all times.
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If you are hiring a vehicle from any of the major rental companies in Massachusetts and don’t know if you’re covered by insurance, then clarify this with them before risking it!
If you borrow a family member or friend’s car and they are the person who originally hired it and don’t have any insurance coverage on the vehicle for commercial activity, then neither do you.
So when someone asks if they need to get pizza delivery insurance when hiring their pizza car, the answer is yes because you are now adding additional liability to yourself.
Contracting to deliver on behalf of the pizza shop in Massachusetts
While driving for pizza delivery might seem like an easy way to earn some extra cash in Massachusetts, it’s certainly not free money. When you start driving your own vehicle for business purposes, you can no longer rely on your personal auto insurance to cover any damage or injuries that may occur while you’re on the job – especially if the car you’re using isn’t yours! If you’re currently delivering pizzas without the right coverage in place, here are some risks of driving a hired pizza delivery car without insurance coverage that you should be aware of.
When you’re hiring a car to drive as part of your pizza delivery job, there are quite a few issues that you’ll need to address. One of the most significant risks of driving a hired car without insurance coverage is damage to the car itself. Depending on your monthly payment, this can be pretty costly.
What is hired vehicle insurance in Massachusetts?
Leasing or hiring is a popular option in Massachusetts when buying a new vehicle is not an option. This type of financing allows businesses to get a brand-new vehicle without being saddled with the high cost of purchasing one outright or sinking into debt with a bank loan.
Hiring can also be useful for businesses who only need to use an extra vehicle for a short time period. Some rental agreements can be rolled into a monthly payment loan as well as an extension of credit, so the terms remain flexible.
With hiring, you are required to return the car at or before the end of your agreed term, which may be anywhere from three months to five years.
Hired vehicle insurance is a type of coverage that is designed for hired vehicles being used for commercial activity in Massachusetts. It protects the lessee from financial responsibility for damages to the hired vehicle.
Leased vehicle insurance can be purchased by either the lessor or lessee, depending on their preferences and needs. The cost of hiring a vehicle will typically include some type of hired vehicle insurance coverage.
It will vary depending on what level of protection you want and how long you hire your vehicle for.
In the case that a hired vehicle is damaged in Massachusetts, the lessor may still be responsible for reimbursing the lessee for any costs associated with repairing or replacing it.
In some cases, hired vehicle insurance does not cover damage caused by vandalism or theft. It typically covers only accidents or natural disasters and will not cover pre-existing damages such as those that occurred before the start of the agreement.
The importance of insurance for hired vehicles in Massachusetts
A lot of people don’t know that insurance companies aren’t the only option when it comes to protecting yourself from getting sued if you cause an accident with your car while engaged in business activity.
There are other things you can do, such as purchasing liability coverage that covers damages to third parties, in order to ensure that you don’t end up paying out of pocket if someone brings a lawsuit against you in Massachusetts.
Here’s why liability coverage is so essential if you hire or borrow an auto used for business in Massachusetts.
The dangers of using a non-owned vehicle without insurance coverage
Unowned and borrowed cars being used by businesses in Massachusetts are subject to the same rules as owned vehicles. If a car is unowned, you are required to have liability insurance just like any other vehicle owner.
However, suppose the car is rented or being borrowed. In that case, it is your responsibility to make sure that the owner has liability insurance. Borrowers or renters should ask their car insurance company about borrowing coverage before driving someone else’s car.
Who needs non-owned or borrowed auto insurance?
An unowned or borrowed auto insurance policy protects the individual or business hiring the vehicle in Massachusetts from being responsible for another person’s vehicle damages.
A typical unowned auto insurance policy includes collision and comprehensive coverage and liability coverage when the hired vehicle is in use.
If you’re using a vehicle you don’t own for any aspect of your business activity, an unowned or borrowed policy is necessary coverage.
If you’re hiring in Massachusetts, you still need personal injury protection (PIP) insurance. Borrowed, unowned, and hired vehicles are all examples of automobiles that require liability coverage.
However, many people are not aware that PIP insurance is an essential piece to complete your personal protection.
What are the expected costs of rental, hired and non-owned insurance in Massachusetts?
Start by looking on the internet at websites of the small insurance companies in Massachusetts that offer online portals where you can get a quote. Don’t just select the cheapest offer, but be sure to compare the conditions and terms to ensure that the exact requirements for your business situation are being covered.
In the table below, we present a sample of the price ranges for coverage from popular insurance companies for hired vehicles in Massachusetts.
|Cover||Cost range per day|
|Loss Damage Waiver||$12 – $30|
|Liability coverage||$15 – $20|
|Personal Accident Insurance (PIP)||$7 – $13|
|Vehicle content coverage||$30 – $60|
You can set a deductible amount that you must pay per incident. For most policies offered by insurance companies in Massachusetts, this is usually around $500-$1,000. The insurance cover is valid only if the claim exceeds this amount.
What claims are covered by this insurance in Massachusetts?
- Claims by third parties for restoration of a vehicle damaged in an incidence in Massachusetts. This includes the cost of repairs, including parts and labor. In case of a total write-off, it covers the depreciated value of the vehicle.
- Costs of all medical treatment of third parties injured in Massachusetts. This includes hospitalization and rehabilitation. If the injured party claims loss of earnings, this can be another claim. NOTE: this insurance doesn’t cover the driver’s injuries.
- The value of property that was in the vehicle, such as goods in transit, samples, inventory and business assets.
- The cost of hiring or renting a replacement vehicle during the period of repair.
What is Personal Injury Protection insurance in Massachusetts?
PIP covers your medical bills up to preset limits in Massachusetts per person and includes lost wages while you are unable to work.
How can you protect yourself during use of a hired or borrowed vehicle?
What happens if the hired car gets damaged or stolen in Massachusetts? You may find yourself in hot water if you are not properly covered.
You should seriously consider auto lessee protection when hiring or borrowing your next vehicle in Massachusetts. If the hired vehicle gets damaged or stolen, this coverage will help you recoup the loss. With this type of coverage, you can avoid any financial troubles that may come your way!
When you hire a car in Massachusetts, you are responsible for the cost of the hiring and the insurance. You might think that getting short-term auto insurance coverage is expensive, but it doesn’t have to be.
Short-term auto insurance coverage is available from a variety of different providers in Massachusetts. The cheapest rates are usually found with insurance companies that specialize in this type of coverage.
The lowest premiums and deductibles can be found by looking at companies who have been in business for a long time and who specialize in providing low rates for this type of coverage.