Hired & non-owned automobile liability insurance provides coverage for what scenario?

• A. It covers liability for injuries and property damage caused by owned company vehicles only
• B. It covers liability for third-party injuries and property damage caused by non-owned vehicles used on behalf of the association
• C. It covers only damages to employee or volunteer vehicles
• D. It replaces all other insurance policies

Answer: (B)

When a community association uses vehicles it does not own for association business, there is a liability risk to others if those vehicles cause harm. Hired and non-owned automobile liability insurance specifically covers the association for third-party injuries and property damage that result from the use of those non-owned or rented vehicles while they’re being used on behalf of the association. In other words, if a volunteer’s car (or a rented car) is involved in an accident while performing association duties, this coverage helps pay the liability costs to others.

This doesn’t cover damage to the association’s own vehicles (that would be coverage under the organization’s owned auto policy), nor does it pay for damage to a driver’s own or a volunteer’s personal vehicle. It also doesn’t replace all other insurance policies; it adds a layer of liability protection for situations involving non-owned or hired vehicles used for association activities.