What Nonprofits Should Know About Auto Insurance and Hired Vehicles
August 13, 2026
Your nonprofit doesn't own any vehicles.
So you don't need to worry about auto insurance, right?
Not quite.
Think about how people actually get around on behalf of your organization. An employee drives their own car to pick up supplies. Someone rents a van for an event. A volunteer uses their SUV to deliver donations. A staff member heads across town for a meeting.
None of those vehicles belong to the nonprofit.
The driving, however, is still being done for the nonprofit's work.
That's where hired and non-owned auto coverage comes into the conversation.
You can have auto risk without owning a vehicle
This is probably the biggest misconception around nonprofit auto insurance.
It's easy to think about vehicle risk when your organization's name is on the title. A nonprofit with three vans knows it needs to insure them.
The exposure is less obvious when everyone drives their own cars.
In commercial auto insurance, a non-owned auto generally means a vehicle used in connection with the organization's business that isn't owned, leased, hired, rented, or borrowed by the organization. Employee-owned vehicles used for work are a common example.
A hired auto generally means a vehicle the organization leases, hires, rents, or borrows, subject to the definitions and exceptions in the policy.
So, in everyday nonprofit life:
- An employee drives their own car to a meeting: non-owned auto
- Your organization rents a van for a weekend event: hired auto
- Your nonprofit owns a passenger van: owned auto
Different vehicles. Different relationships to the organization. Potentially different coverage.
The "quick errand" still counts
This is where the conversation gets very real.
Someone needs decorations for tomorrow's fundraiser, so an employee runs to the store.
A volunteer takes donated food to another location.
A program manager uses their own car to visit a client.
These trips feel routine. Nobody thinks of them as a major organizational risk.
Then there's an accident.
When employees use personal vehicles for organizational business, their personal auto insurance may come into play. But the nonprofit can also face liability arising from the employee's driving.
That's one of the reasons organizations should talk with their insurance broker about non-owned auto liability coverage rather than assuming an employee's personal policy settles the entire issue.
Commercial General Liability policies also commonly contain auto exclusions, so organizations shouldn't assume their General Liability coverage will simply pick up an auto-related claim.
Renting a car doesn't make the question simpler
Rental counters make insurance look pretty easy.
You rent the vehicle. Someone asks whether you want the extra coverage. You say yes or no. Then you're handed the keys.
For an organization, there can be more to consider.
Who rented the vehicle?
Was it rented in the organization's name or the employee's?
Does your commercial policy cover hired autos?
What about physical damage to the rental vehicle itself?
These aren't questions you want to figure out while standing at a rental counter with six people waiting behind you.
If your nonprofit rents vehicles even occasionally, ask your broker how your policy handles them before the next rental happens.
Volunteers deserve a closer look
For many nonprofits, volunteers drive all the time.
And because volunteering feels less formal than employment, the insurance side of it can easily get overlooked.
Maybe volunteers:
- Deliver meals
- Transport supplies
- Drive to community events
- Travel between program locations
- Use their personal vehicles for outreach
If driving is part of someone's volunteer role, your organization should know what insurance requirements apply and what your own policy does if there's an accident.
It may also make sense to have a written driver policy covering things like licensing, acceptable driving records, vehicle insurance requirements, accident reporting, and when personal vehicles can be used for organizational work.
In California, the DMV's Employer Pull Notice program allows organizations to monitor certain drivers' motor vehicle records. Some employers are required to participate depending on the vehicles and driving involved, while organizations can also enroll certain non-mandated employees and volunteers with the appropriate authorization.
That doesn't mean every nonprofit needs to enroll every volunteer. It does mean organizations with significant driving exposure should understand the rules that apply to them.
Personal auto insurance isn't the nonprofit's auto policy
Here's another assumption worth clearing up.
An employee saying, "Don't worry, I have insurance," is useful information.
It isn't the whole answer.
Their policy belongs to them. Your organization's insurance belongs to the organization.
If an employee causes an accident while conducting nonprofit business and the organization is also named in a lawsuit, you want to know how your organization's coverage responds.
There can also be situations where an employee's personal policy limits or excludes particular types of business use. Personal auto policies vary, which is another reason not to build an organization's entire risk strategy around assumptions about employees' individual coverage.
Driving should be treated like any other workplace risk
If someone regularly drives for your nonprofit, it shouldn't be an informal arrangement nobody has really thought through.
You don't need to make it complicated.
Start with some basic questions:
- Who drives on behalf of the organization?
- Are they employees, volunteers, or both?
- Whose vehicles are they using?
- How often are rental vehicles used?
- Do you verify licenses and driving records when appropriate?
- Do you have minimum insurance requirements for people using personal vehicles?
- Is there a clear process for reporting accidents?
- Does your commercial insurance include the hired and non-owned auto coverage you actually need?
You may go through that list and realize you're in good shape.
Great.
Or you may discover that "Susan usually uses her car for that" is basically your entire transportation policy.
That's worth fixing.
Hired and non-owned coverage doesn't cover everything
This is an important distinction.
Hired and non-owned auto coverage isn't the same thing as simply putting a vehicle on a commercial auto policy.
For example, liability coverage for the organization doesn't necessarily mean an employee driving their own vehicle is personally insured by the organization's policy. Certain commercial auto endorsements can broaden protection for employees in specific circumstances.
Physical damage is another issue. Coverage for liability arising from a rented vehicle doesn't automatically mean damage to the rented vehicle itself is covered.
Policy wording, covered-auto symbols, endorsements, and state requirements all matter.
You don't need to memorize any of that.
You just need to know enough to ask the question.
"If one of our employees or volunteers gets into an accident while driving a vehicle we don't own, what happens?"
That's a very useful conversation to have with your broker.
Take five minutes and think about who drives for you
Not tomorrow. Not just the people with "driver" somewhere in their job description.
Think about last week.
Who drove somewhere because of work?
Who picked something up?
Who visited a client?
Who went to the bank?
Who transported equipment?
Who rented a vehicle?
You may realize your organization has more auto exposure than you thought.
That's normal. The important part is recognizing it and making sure your policies, procedures, and insurance have kept up.
Because "we don't own any vehicles" and "we don't have any auto risk" are two very different things.
Not sure what happens when an employee or volunteer drives for your organization? Talk with CNIS about your auto coverage before the next trip.
Helpful Resources
International Risk Management Institute (IRMI): Hired Automobile
A technical definition of hired autos and how the term is used in commercial auto coverage.
https://www.irmi.com/term/insurance-definitions/hired-automobile
International Risk Management Institute (IRMI): Nonowned Automobile
A helpful explanation of non-owned autos under commercial insurance policies.
https://www.irmi.com/term/insurance-definitions/nonowned-automobile
California DMV: Employer Pull Notice Program
Information for California organizations about monitoring driving records, including requirements for certain employers and options involving employees and volunteer drivers.
