Hired and Non-Owned Auto Exposure for HVAC Subcontractors: What Your Policy Should Cover

As an HVAC subcontractor operating in Houston, TX (or across Texas and other commercial hubs like Dallas and San Antonio), your team depends on vehicles that you own, rent, borrow or that employees drive personally for business. Hired and Non-Owned Auto (HNOA) exposures are among the most common — and most overlooked — causes of expensive liability claims. This guide explains what HNOA covers, what your policy should include, recommended limits for HVAC subcontractors, and practical buying tips with pricing context from major insurers.

What is Hired vs Non-Owned Auto coverage?

• Hired Auto Liability covers liability when your business rents or hires a vehicle (for example, a rental van used while a service truck is in repair).
• Non-Owned Auto Liability covers liability when employees use their personal vehicles to perform company business (service calls, parts pick-up, site visits).
• Together they're commonly purchased as an endorsement to a commercial auto or a general liability policy and protect your business from third-party claims arising from the operation of vehicles your business does not own.

Source: Insurance Information Institute — What is business auto insurance? (https://www.iii.org/article/what-is-business-auto-insurance)

Why HVAC subcontractors in Houston, TX should prioritize HNOA

• High frequency of employee-driven site visits and parts runs.
• Regular use of rental trucks or leased vans for large installs.
• Common contract clauses requiring vendors and contractors to carry auto liability limits and name hiring companies as additional insureds or require primary/noncontributory wording.
• Texas has high litigation exposure for auto liability — a serious crash involving a service van can expose both the driver and the employer.

Practical example: a Houston HVAC technician borrows his personal pickup to haul a condenser and hits another car on I-45 during a service call. That crash triggers non-owned liability for the subcontracting company.

What your HNOA policy should explicitly cover

When buying HNOA, include or confirm each item below in writing:

• Liability limits: Minimum $1,000,000 per occurrence recommended for most HVAC subcontractors; consider $2M–$5M if hauling expensive cargo or working on large commercial projects.
• Primary and noncontributory wording: Required by many general contractors so your insurer is primary and pays before other policies.
• Waiver of subrogation: Often required by contract to prevent the insurer subrogating against the hiring company.
• Hired Auto Physical Damage (HAPD): Rental or hired vehicles are not automatically covered for physical damage — buy HAPD or confirm rental company coverage.
• Employee hired autos: Confirm it’s clear the endorsement covers employees driving personal vehicles on company business.
• Medical Payments/UM (where available): Uninsured/underinsured motorist coverage is valuable in states that allow it.
• Defense, cost of defense, and supplemental payments: Confirm whether defense costs erode limits or are paid in addition to limits.
• Certificates of insurance and evidence of coverage: Ensure the insurer will issue certificates promptly and include required contractual language.

Recommended limits and endorsements (HVAC subcontractor baseline — Houston, TX)

• Bodily injury/property damage: $1,000,000 CSL (Commercial Single Limit) — baseline.
• If subcontractor works on large commercial/municipal projects: $2,000,000–$5,000,000.
• Hired auto physical damage: Agreed value or actual cash value for rented vehicles; deductible level set by your budget/risk tolerance.
• Employer Non-Owned Liability: include where employees use their vehicles on company business.

Typical costs and insurer examples

Costs vary widely by driving records, vehicle types, radius of operations, payroll, and claims history. For context:

• Commercial auto premium per HVAC service van (owned vehicle) in Texas: $1,200–$4,000+ per vehicle/year, depending on driver history, radius and vehicle value. (Insureon averages: https://www.insureon.com/small-business-insurance/coverage/commercial-auto-insurance/cost)
• Hired & Non-Owned Auto endorsements are typically lower-cost add-ons relative to full commercial auto liability — common ranges are $100–$600 per covered driver/vehicle per year depending on limits and exposure. (See The Hartford and Travelers HNOA descriptions below.)

Comparison table (estimated ranges — use for budgeting; get exact quotes):

External pricing sources and guidance:

• Insureon — commercial auto cost guidance: https://www.insureon.com/small-business-insurance/coverage/commercial-auto-insurance/cost
• The Hartford — Hired & Non-Owned Auto coverage: https://www.thehartford.com/business-insurance/coverage/hired-and-non-owned-auto
• Travelers — Hired and Non-Owned overview: https://www.travelers.com/business-insurance/auto/hired-non-owned

Note: these figures are illustrative. Actual quotes for Houston-based HVAC subcontractors will depend on revenue, vehicle usage, driver training programs, telematics and claims history.

Practical risk controls that reduce HNOA exposure and premiums

• Implement rigorous driver screening, MVR checks and written driver policies. See Building a Safer Fleet: Driver Screening, Training and Policies for HVAC Companies.
• Use telematics/GPS to monitor driving behavior — many insurers (Progressive, The Hartford, Travelers) offer telematics discounts. See Telematics, GPS and Telematics Discounts: Using Data to Cut Fleet Insurance Costs.
• Require certificates and hold harmless agreements from subcontractors and vendors; align contractual language with policy capabilities.
• Purchase HAPD when renting vehicles for a long period or when rental contracts exclude damage coverage.

Common claims scenarios (and how HNOA responds)

• Employee driving personal vehicle on a service call strikes a pedestrian: Non-Owned Liability typically covers third-party bodily injury and property damage up to policy limits.
• Rented delivery truck overturns while hauling HVAC equipment: Hired Auto Liability covers third-party liability, while HAPD covers the rented truck’s physical damage if purchased.
• Company is named as additional insured under a GC contract and accused of negligence related to a crash: well-drafted HNOA with primary/noncontributory language and a waiver of subrogation can protect contracting relationships.

For deeper claim examples and tactical language to include in your policy, see Claims Scenarios Involving HVAC Service Vans: Liability, Cargo and Damage Solutions.

How to buy (Houston, TX action checklist)

1. Inventory exposures: number of employees who drive, rental use frequency, radius of operations, types of cargo.
2. Ask carriers for HNOA and HAPD endorsements and sample policy language for “primary/noncontributory” and “waiver of subrogation.”
3. Compare quotes from specialty carriers (The Hartford, Travelers, Progressive Commercial) and local Texas brokers.
4. Bundle where possible — combining commercial auto, HNOA and general liability often reduces overall cost. See related guidance: Commercial Auto Insurance Essentials for HVAC Contractors: Coverage You Can’t Ignore.
5. Document driver training, use telematics and require COIs from client contracts to reduce rate and protect subcontractor relationships.

Bottom line

For HVAC subcontractors in Houston and similar Texas markets, Hired and Non-Owned Auto coverage is not an optional add-on — it’s essential protection that preserves contracts and corporate assets in the event of vehicle-related loss. Aim for at least a $1,000,000 liability limit, ensure primary/noncontributory and waiver of subrogation language when required by clients, and add Hired Auto Physical Damage when renting vehicles. Work with a broker who understands contractor exposures and can secure tailored HNOA endorsements from carriers like The Hartford, Travelers or Progressive.

Further reading and next steps:

• How to Insure a Growing HVAC Fleet: Rating, Limits and Fleet Management Best Practices