Hired & Non-Owned Auto (HNOA) insurance is one of the most affordable commercial coverages for restaurants - but the price isn't the same for everyone. What you pay depends on your delivery volume, radius, operating hours, driver records, and claims history.
At Anchor Insurance, we help restaurant owners understand exactly what drives HNOA pricing and how to structure coverage to get the best value without leaving gaps in protection.
What Does HNOA Typically Cost for Restaurants?
For most small to mid-sized restaurants, HNOA premiums range from $300 to $1,200 per year, depending on risk factors. Larger operations with high delivery volume or extended hours may pay $1,500 to $2,500 annually.
Because HNOA is liability-only coverage (it doesn't insure the vehicles themselves), it's significantly cheaper than commercial auto insurance, which typically costs $1,200 to $5,000+ per vehicle annually.
Factor 1: Delivery Volume (How Many Deliveries Per Week?)
Why Delivery Volume Matters
The more deliveries your restaurant makes, the more time your employees spend on the road - and the higher your probability of an accident. Carriers use delivery volume as a proxy for exposure.
How Carriers Evaluate Volume
- Low volume (under 25 deliveries/week): Lowest risk tier; often qualifies for standard HNOA rates or may be added as an inexpensive endorsement to your BOP
- Moderate volume (25-100 deliveries/week): Standard pricing; most carriers are comfortable with this level of delivery activity
- High volume (100+ deliveries/week): Higher premiums; some carriers may require commercial auto instead of HNOA, or mandate fleet safety programs
How to Reduce Cost
- Use third-party platforms (DoorDash, Uber Eats) to offload some delivery volume and reduce your direct exposure
- Track actual delivery counts accurately - overestimating volume increases your premium unnecessarily
Factor 2: Delivery Radius (How Far Do You Deliver?)
Why Radius Matters
Longer delivery distances mean more miles driven, higher accident probability, and potentially higher-speed accidents (which result in more severe injuries and damage).
How Carriers Tier Radius Risk
- Short radius (under 3 miles): Lowest risk; urban, low-speed deliveries with minimal highway exposure
- Standard radius (3-5 miles): Most common for restaurant delivery; standard pricing applies
- Extended radius (5-10 miles): Moderate increase in premium; more highway driving, higher severity of potential accidents
- Long radius (10+ miles): Highest risk tier; some carriers decline coverage or significantly increase premiums. Catering operations often fall into this category.
How to Reduce Cost
- Set clear delivery radius limits and enforce them (e.g., maximum 5 miles for standard delivery)
- Use third-party platforms for deliveries beyond your radius
- For catering, consider renting vehicles with insurance included or purchasing commercial auto for long-distance runs
Factor 3: Operating Hours (When Do You Deliver?)
Why Hours Matter
Late-night deliveries (typically 10 PM - 4 AM) carry significantly higher risk due to:
- Increased DUI exposure on the roads
- Driver fatigue
- Reduced visibility
- Higher crime rates
How Carriers Evaluate Operating Hours
- Daytime only (6 AM - 10 PM): Standard pricing; minimal late-night surcharge
- Late-night operations (10 PM - 4 AM): Premium increase of 10-25% or more; some carriers exclude late-night deliveries entirely
- 24-hour operations: Highest risk tier; fewer carrier options, higher premiums, may require fleet safety protocols
How to Reduce Cost
- Limit delivery hours to 6 AM - 10 PM if possible
- Use third-party platforms for late-night orders to transfer liability
- If you must deliver late, implement driver safety protocols (two-person teams, GPS tracking, dashcams) to negotiate better rates
Factor 4: Number of Drivers and Driver Records
Why Driver Count Matters
More drivers mean more exposure. Carriers also evaluate the quality of your driver pool:
- Clean MVRs (Motor Vehicle Records) result in lower premiums
- Drivers with recent accidents, DUIs, or moving violations increase premiums or may be excluded
- High driver turnover increases risk (less experience, less training)
How Carriers Evaluate Drivers
- 1-5 drivers: Standard pricing; most carriers require MVRs for all drivers
- 6-10 drivers: Moderate premium increase; some carriers require fleet safety programs
- 10+ drivers: Highest tier; may require commercial auto instead of HNOA; formal driver training and monitoring may be required
How to Reduce Cost
- Screen drivers before hiring: verify valid licenses, run MVR checks, exclude drivers with poor records
- Provide driver training and safety incentives to reduce accidents
- Report accurate driver counts - don't overestimate
Factor 5: Claims History (Past Accidents and Lawsuits)
Why Claims History Matters
Carriers review your restaurant's loss runs (record of past insurance claims) to assess whether you're a high-risk account. Frequent auto liability claims signal poor driver management or unsafe operations.
How Carriers Use Claims History
- No claims in 3-5 years: Best pricing tier; clean record demonstrates good risk management
- 1-2 claims in past 3 years: Moderate premium increase; carriers will review claim details (severity, fault)
- 3+ claims or severe claims: Significant premium increase or coverage denial; may be moved to a high-risk market
How to Reduce Cost
- Implement a driver safety program to prevent future claims
- Consider higher deductibles to reduce premium (if financially feasible)
- Work with a broker who can shop carriers specializing in claims-heavy accounts
Factor 6: Coverage Limits (How Much Liability Protection?)
Common HNOA Liability Limits
HNOA policies typically offer the following liability limits:
- $500,000 per occurrence: Minimum for most small restaurants; often too low for serious accidents
- $1 million per occurrence: Standard recommendation; provides adequate protection for most claims
- $2 million or higher: For high-volume delivery operations, late-night deliveries, or catering with long-distance runs
How Limits Affect Pricing
Higher limits increase your premium, but not proportionally. For example:
- $500,000 limit: $400/year
- $1 million limit: $600/year (50% increase in coverage, but only 50% increase in cost)
- $2 million limit: $850/year (300% increase in coverage, but only 112% increase in cost)
In most cases, it's worth paying slightly more for higher limits to avoid catastrophic out-of-pocket exposure.
Factor 7: Location (Where You Operate Matters)
Why Location Impacts Pricing
Auto liability costs vary significantly by state and metro area due to:
- Accident frequency and severity (urban vs. rural)
- Medical costs and legal environment (tort-friendly states have higher premiums)
- State minimum insurance requirements
High-Cost vs. Low-Cost States
- Higher-cost states: California, New York, Florida, Michigan, Louisiana (higher litigation rates, expensive medical care)
- Lower-cost states: Iowa, Idaho, North Dakota, Vermont (lower accident rates, less litigation)
You can't change your location, but knowing this factor helps set realistic budget expectations.
How to Get the Best HNOA Price for Your Restaurant
1. Provide Accurate Delivery Data
Underwriters need precise information to price your policy. Provide:
- Actual delivery count per week (not estimates)
- Maximum delivery radius
- Operating hours (start and end times)
- Number of drivers and their MVRs
2. Shop Multiple Carriers
HNOA pricing varies widely between carriers. Some specialize in restaurant delivery; others don't. An independent broker like Anchor can shop your risk to 10+ carriers and find the best fit.
3. Bundle with Your BOP or General Liability
Some carriers offer discounts if you add HNOA as an endorsement to your Business Owners Policy (BOP) rather than purchasing it standalone. This can save 10-20% on your total premium.
4. Implement Risk Management Practices
Carriers reward businesses with strong safety protocols:
- Driver screening and MVR checks
- Formal driver training programs
- GPS tracking or dashcams in vehicles
- Restricted delivery hours or radius
5. Review Your Coverage Annually
Your delivery operations change over time. Review your HNOA policy annually to ensure:
- Your delivery volume, radius, and hours are still accurate
- You're not overpaying for coverage you don't need
- Your limits are adequate for current operations
Frequently Asked Questions
How much does HNOA cost for a small restaurant with 10 deliveries per week?
For a small restaurant with low delivery volume (10 deliveries/week), short radius (under 3 miles), and daytime hours only, HNOA typically costs $300 to $600 per year. This often can be added as an endorsement to your BOP for even less.
Will my HNOA premium increase if I add more drivers?
Yes, but not dramatically. Adding a few drivers with clean MVRs may increase your premium by 5-15%. However, if you add drivers with poor driving records or significantly increase your driver count (e.g., from 3 to 10), expect a larger increase. Carriers may also require fleet safety programs for larger driver pools.
Can I reduce my HNOA cost by increasing my deductible?
HNOA is liability-only coverage, so there is typically no deductible for third-party claims (the carrier pays claims directly). However, some policies include a self-insured retention (SIR) for smaller claims. Increasing the SIR can reduce your premium, but it means you'll pay out-of-pocket for smaller incidents.
Does HNOA cost more if I deliver alcohol?
Alcohol delivery itself doesn't directly increase HNOA premiums (HNOA covers auto liability, not liquor liability). However, if you deliver alcohol, you need a separate liquor liability policy, which does add to your overall insurance costs. Some carriers may view alcohol delivery as a higher-risk operation and price HNOA accordingly.
What's the cheapest way to get HNOA coverage?
The most cost-effective approach is to add HNOA as an endorsement to your Business Owners Policy (BOP) if your carrier offers it. This is almost always cheaper than purchasing standalone HNOA. If that's not an option, shop multiple carriers through an independent broker to compare pricing. At Anchor, we can quote HNOA across 10+ carriers to find the best rate for your specific operation.