Recently, I got this inquiry in LinkedIn:

“If a business has volunteers that they reimburse for mileage is that now a hired auto? Per the [insurer] it is but hired isn’t defined in the policy.”

Under ISO rules and forms, Symbol 8 applies to nonowned autos leased, hired, rented, or borrowed by the insured, while Symbol 9 applies to nonowned autos NOT leased, hired, rented, or borrowed by the insured.

For a detailed discussion, including case law citations, I would refer the reader to the discussion at IRMI (subscription required). For an opinion, I believe this to be a Symbol 9, not Symbol 8, liability exposure (of course, to remove all doubt, use Symbol 1).

“Hired” usually refers to compensation beyond simple mileage reimbursement. “Borrowed” may not involve any compensation but likely requires some degree of possession and control of the vehicle, not just someone using their auto to do a favor for the insured.

Often hired auto coverage, for example when renting or leasing an auto, necessitates physical damage coverage in order to comply with the insured’s contractual obligation to cover damage to the vehicle. Under ISO rules, physical damage coverage is available under Symbol 8 and not Symbol 9.

Is the insurer willing to provide physical damage coverage for the autos of volunteers? Highly unlikely. More likely they wouldn’t treat such vehicles any differently than they would the autos of employees which are usually subject to Symbol 9 coverage.

As for borrowing, coverage expert Mike Edwards, CPCU cites Schroeder v. Board of Supervisors of Louisiana State University, 591 So.2d 342 (La. 1991) where a student used his father’s car to give another student a ride to run an errand at the request of a professor. The state supreme court held that “borrowing” requires the “substantial possession, dominion, control, or the right to direct the use of the vehicle.”


Photo by Steve Bowbrick

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Bill Wilson

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One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information