What is hired auto coverage in fleet insurance?

Complete Guide to Hired Auto Coverage in Fleet Insurance

Why This Question Matters for Colorado and Utah Residents

If your business ever needs to rent or lease vehicles—even for a day—you face risks that standard fleet insurance may not cover. In Colorado and Utah, where weather events like hailstorms and slick winter roads are common, or where seasonal business spikes demand short-term vehicle rentals, not having the right protection can mean unexpected costs and delays.

• High-risk regional conditions: Hailstorms cause an average $6,000 in damage per vehicle in Colorado, and Utah's winter conditions increase accident risks for rented vehicles.
• Regulatory compliance: State law requires all commercial vehicles, owned or rented, to meet liability minimums ($25K/$50K/$15K in both states), but liability for rented vehicles frequently gets overlooked.
• Business continuity: Rental downtime in Northern Colorado or Utah can cost businesses $1,800 or more per day—a risk hired auto coverage helps address by smoothing out claims and making rental costs insurable.

What Most People Get Wrong

Many businesses mistakenly think their regular fleet or auto insurance covers any vehicle their employees drive for work, but that usually applies only to listed, company-owned vehicles. Temporary rentals, like vans needed for a big project or seasonal spike, are often not included without this specific endorsement.

Another common misconception? That the rental company's insurance is always enough, when in reality, those policies often provide only state-minimum coverage and high deductibles—leaving your business exposed if damages or injuries exceed those limits or if there's a regional weather event.

The Complete Picture

Hired auto coverage is an essential part of a comprehensive fleet insurance program for businesses that rent or lease vehicles temporarily for company operations in Colorado or Utah. It "extends" your fleet policy’s critical protection—like liability, medical payments, and sometimes even physical damage—to these rented vehicles. Whether your business rents vans for a single weekend project in Denver, or uses extra delivery trucks during Salt Lake City's busy festival season, hired auto makes sure accidents, weather damage, or other incidents don’t leave you footing the bill.

Why is this especially crucial here? In Northern Colorado alone, 48% of all fleet claims arise from hail and weather damage—making physical damage coverage (an optional but smart add-on to most hired auto policies) a hot topic for local businesses. Meanwhile, strict commercial fleet reporting and minimum coverage laws in both states require you to prove insurance even on short-term rentals—a legal pitfall for the unwary.

Smart businesses in the region build hired auto into their policies before the busy season starts, ensuring every vehicle—whether rented for a week or a day—is covered. This essential coverage not only prevents surprise expenses, but also shows you’re thinking ahead for your team, your clients, and your bottom line.

Making the Right Decision for Colorado and Utah Residents

Question 1: Does your business ever rely on rented or leased vehicles?

Review your company’s operations and seasonal patterns:

• Do you rent vehicles for delivery surges (e.g., holidays, festivals, or large events)?
• Does your fleet ever temporarily expand for construction, landscaping, or snow removal projects?

If yes, consider how often these rentals occur, and confirm if your policy specifically lists hired auto coverage.

Question 2: How much would it cost your business if a rented vehicle was damaged or caused an accident?

Consider all exposure and costs:

• Typical hail claim in Colorado: $6,000 per vehicle; collision averages $4,200 in Utah (source: NAIC reports and state claims data)
• Rental vehicle downtime: $1,800+ per day for lost business, plus direct repair and liability costs

Calculate these figures for your typical rental and season, and compare the cost of adding hired auto coverage versus paying out-of-pocket for one major event.

Question 3: Are you planning changes that could increase your use of rentals?

Are you expanding operations, opening new branches (such as in the I-25 corridor or Salt Lake Valley), or responding to regional risks like wildfire evacuations? Planning ahead ensures your insurance keeps pace with your business, so you never have a coverage gap when you need it most.