Food Delivery Insurance: Are You Covered?
The COVID-19 pandemic caused an unexpected economic downturn that left millions unemployed. It made gig work, like food delivery, a tempting way to earn extra money. The demand for a reliable delivery driver has skyrocketed, but many drivers don't think about car insurance until it's too late..
Delivery food services such as Postmates, Grubhub, Uber Eats, and DoorDash have more customers than ever using their services. Amazon has also hired another 100,000 workers to meet its expanding workload.
In March, The RideShare Guy Blog surveyed 200 gig workers. The respondents said they would switch from ridesharing to food delivery because demand in that industry was greater.
Although these jobs can provide a much-needed stream of income for food delivery drivers, they also come with a few risks, especially if the driver is relying on personal car insurance to deliver food.
Accidents and Food Delivery Insurance
If you are a delivery driver and you get into an accident, you could be on the hook for any property damage or injuries you cause to a third party if you don't have the right car insurance coverage. We'll tell you which insurance coverage you'll need to protect yourself as a food delivery driver.
You will need an affordable commercial car insurance to work as a food delivery driver. SmartFinancial's free online tools can provide you with quotes from several auto insurance companies. Just enter your zip code and we'll connect you with local agents that may save you up to 40 percent on your car insurance cost.
A Personal Auto Insurance Policy Doesn't Cover Food Delivery Work
Picking up restaurant and grocery orders for customers seems like a great way to earn some extra cash, but it comes with risks for the delivery driver. According to the federal government, delivery drivers have one of the most dangerous jobs in the nation. Traffic accidents are the leading cause of death for these workers.
If you're a food delivery driver, an accident will not only harm your physical health; it can also set you back financially. So, you need a great car insurance policy to protect your vehicle and your future.
Unfortunately, many on-demand delivery services haven't told their delivery drivers everything about auto insurance related risks. So, food delivery drivers don't know that personal car insurance is not enough to protect themselves.
Insurance for Food Delivery
On-demand delivery services often require a delivery driver to only carry personal auto insurance policies, but unless you have commercial car insurance you may not be covered for an accident while using your car for meal deliveries. A delivery driver may learn this too late, after they get into a traffic accident. A personal auto insurance policy won't cover business use, so it will not cover a food delivery driver.
Oftentimes, a delivery driver will discover that their insurer won't pay for their property damage, medical expenses or third-party claims because of policy exclusions that prohibit coverage of vehicles used for commercial purposes like deliveries. If the car insurance company denies your claim, you'll have to pay for any accident-related costs out-of-pocket.
What About the Company's Commercial Car Insurance?
You can't rely on the company's commercial car insurance, either. It will only kick in after you've used up your personal car insurance coverage. Additionally, the delivery service's commercial policy will only settle third-party claims, not damages to your own car.
They won't pay for your property damages. If you don't have the right commercial car insurance, you'll have to pay for these on your own.
You Can't Lie to Your Insurer to Get Coverage
If you think you can lie to car insurance companies about delivering food when your accident occurred, you're mistaken.
Many insurers have Special Investigative Units that look into claims to make sure they are legitimate, especially for large settlement payouts. Additionally, the insurance company will interview accident witnesses and examine your background to uncover any false information. For example, a witness may say you had delivery bags on your seat when the accident occurred.
If the car insurance company found out you lied; it will not only deny your claim, it may also cancel your coverage and bring criminal charges against you. You would be on the hook for any medical expenses and damage that occurs in the accident, and you may face jail time.
Commercial Car Insurance Policies for Delivery Drivers
Before starting work, you must read through your delivery company's automobile insurance to see what's covered, then buy the right coverage to protect yourself. Taking this step will protect you from financial hardship. Most companies will only pay for losses after you use up your personal insurance.
Here are a few car insurance policies that most popular food delivery companies provide for their couriers:
Minimum Liability Coverage for DoorDash Drivers.
DoorDash is an on-demand prepared meal delivery service founded in 2013. This company provides contingent liability insurance to cover its delivery partners.
It only insures couriers who are actively bringing orders to clients if they're involved in an accident. Their car insurance policy doesn't protect drivers traveling to a restaurant to pick up meals or leaving from deliveries.
DoorDash's insurance only pays for any damages drivers cause to another party en route to their deliveries. The company has a commercial auto insurance policy that covers up to $1,000,000 in bodily injury and/or property damage to third parties arising out of accidents.
It doesn't offer collision coverage to its food delivery drivers. So, if you have an auto accident, DoorDash will only pay for damages that you caused to a third party and their passengers, but they won't pay for any car damage you sustained. Only a commercial car insurance policy will cover you.
Another thing to remember: DoorDash's food delivery vehicle insurance will only kick in after you've used up your auto insurance coverage. If you don't keep your car insurance active, DoorDash's coverage will not apply.
With that said, personal auto policies don't cover damages that food delivery drivers sustain during deliveries and other commercial activities. If the terms and conditions exclude these activities, your auto insurance company will deny your claim. If you don't have commercial car insurance, you'll have to pay for these expenses out-of-pocket. You'll need commercial auto insurance to be fully insured.
DoorDash's Optional Occupational Accident Coverage
On June 27, 2019, DoorDash began offering optional occupational accident insurance for its U.S. drivers. It covers:
- Medical Expenses: Up to $1 million with no deductible or co-pay
- Disability Payments: Up to $500 per week
- Survivors Payments: Up to $150,000 for eligible dependents.
However, this type of auto insurance policy doesn't cover every scenario that a food delivery driver may experience on the road, so it may not be enough to cover your medical expenses or vehicle damages.
It's wise to spend the extra money upfront to get the right food delivery auto insurance coverage to protect yourself and your family.
If you need to purchase additional auto insurance, you can use an online comparison service, like SmartFinancial, to find better coverage while using your car to deliver food.
You can get a free online quote from different auto insurance companies in your local area. We can help you find food delivery insurance that will provide you with the personal coverage. Just enter your zip code to get started.
What Food Delivery Driver Coverage Does UberEats Offer?
UberEats is an online food ordering and delivery platform based in San Francisco. Last year, UberEats launched new commercial insurance for delivery drivers that provide $1 million of liability coverage per accident.
This food delivery driver insurance offers coverage similar to its rideshare program, which begins from the moment you accept an order until you complete delivery.
Their auto insurance coverage will only reimburse any third-party liability claims against their delivery drivers. It doesn't cover any property damages their vehicles sustain while delivering food.
UberEats also offers contingent comprehensive and collision insurance during the delivery process. It's only available to delivery drivers that already have comprehensive and collision coverage so it's wise to buy full coverage auto insurance.
You'll need to exhaust your personal car insurance first before this supplemental policy kicks in. It pays for any accident-related property damage your vehicle sustains (up until its actual cash value). You must pay a $1,000 deductible before the business takes care of any damages.
The company also has commercial auto liability insurance for delivery drivers. This type of commercial car insurance covers damages that its delivery partners cause to third-parties. It provides the following coverage: Bodily Injuries: Up to $50,000 for each individual with a total of $100,000 per accident.
Property Damage: $25,000 property damage coverage between deliveries.
You will be responsible for any damages that exceed the policy's limits. Additionally, UberEat's commercial car insurance won't protect you when you're traveling to a restaurant to get an order, or after you finish a delivery. You'll need an additional Period One insurance to protect yourself.
Postmates Insurance Policies for Drivers
Postmates is an American tech company that handles the on-demand delivery of goods, groceries and meals from local restaurants.
Starting on October 1, 2019, the company said it will automatically provide Occupational Accident Insurance to its independent contractors who sustain injuries in an accident during deliveries.
This auto policy applies to every delivery order. It's in effect when a driver accepts an order until they complete it. The insurance covers:
- Medical Expenses: Up to $1 million with no deductible or copay
- Temporary Total Disability: Up to $500 maximum per week
- Continuous Total Disability: Up to $500 maximum per week
- Accidental Death: $100,000
- Survivors Benefits: $100,000
- Accidental Dismemberment: $200,000
The company also gives drivers $1 million in general liability coverage for third-party claims. Visit this page for more details about Postmates' coverage.
Like other delivery services, Postmates won't pay for your property damage when you're in a traffic accident. You'll need to buy your own auto insurance.
"Property damage sustained to your property in an accident are your responsibility and should be addressed by your personal insurance carrier," the company said on their website.
Postmates' auto insurance policy provides excess coverage for third-party property damage and bodily injury claims only. Again, most auto policies won't pay for property damage you receive in an accident related to food delivery work unless you have commercial auto insurance.
You'll Need Renters or Home Insurance as a Postmates Driver
Auto insurance companies prohibit coverage of commercial activities under their exclusions. Having renters or home insurance coverage is also critical, especially when working as a Postmates courier. Delivery drivers carry expensive items such as laptops, tablets, and smartphones. A high-impact accident can damage these items, which are never covered by auto insurance.
Do you not have the right food delivery auto insurance? Comparison tools, like SmartFinancial, can help you save money on your commercial auto coverage. Just enter your zip code on this page and we can find you a quote from auto insurance companies in your area.
Grubhub Offers No Insurance Coverage for Its Drivers
Grubhub is an online mobile food-ordering and delivery marketplace based in Chicago. This company provides zero food delivery auto insurance coverage for its delivery partners. That's right: you're on your own if an accident happens.
If food delivery drivers get into accidents on the road, they're liable for any physical and property damages that they sustain. They must also pay for any damages that other drivers and their passengers suffer.
They require drivers to have personal auto insurance coverage. Unfortunately, a personal policy won't cover accidents that occur during commercial deliveries. You'll need commercial auto insurance to be fully insured while delivering food.
Are you a driver who needs insurance for food delivery? Your personal insurance policy won't cover your gig work.
Using a free online comparison service like SmartFinancial can help you find coverage for your personal vehicle. Just enter your zip code to get started. If you use these tools to compare rates on your insurance, you could save almost 40 percent on your auto policy rates.
Amazon Flex Offers the Most Coverage for Delivery Partners
Amazon Flex is a service that allows people to use their own vehicles to deliver packages. The company provides its delivery drivers with coverage through its Amazon Flex Auto Policy.
This coverage only applies while couriers deliver packages, pick up packages or return undelivered ones to a designated location. It includes liability insurance, uninsured/underinsured motorist coverage and contingent comprehensive and collision policies.
They offer the following commercial auto insurance coverage for delivery drivers while they're working:
- Liability Insurance: This $1 million policy covers a driver's damages to a third party.
- Uninsured/Underinsured Coverage: It provides $1 million in coverage to Amazon Flex Drivers when they suffer injuries or property damages caused by underinsured motorists.
- Contingent Comprehensive and Contingent Insurance: Provides up to $50,000 to cover damages to a driver's car while delivering with Amazon. Its contingent coverage is only available to drivers who already have comprehensive and collision coverage on their personal policies. If you have a claim, you must pay a $1,000 deductible before the policy kicks in.
This car insurance policy is not available for New York drivers who must purchase commercial auto insurance coverage.
Ask Your Car Insurance Company About Your Current Coverage
Even if your auto insurance policy doesn't specifically exclude coverage for commercial activities, it doesn't mean your insurance policy will automatically cover these accidents. Your personal policy may still contain language that forbids coverage of commercial insurance claims.
Start your courier business off on the right foot by making sure you have enough auto insurance coverage insurance to protect yourself.
Read the Fine Print About Using Your Vehicle
Find out whether your current car insurance policy excludes the coverage of commercial work.
Download a current copy of the terms and conditions of your current personal policy.
Use the search feature in your word processing /PDF program, and search for insurance exclusion terms like "delivery," "commercial," or "livery".
Talk to Your Agent
Be honest with your insurance agent and let them know you're considering earning extra money as a food delivery driver. If you don't notify your insurer about your new occupation, he or she may cancel your policy. They may also deny any subsequent claims you submit if you ever have an accident.
Ask your insurance agent about what your car insurance policy does and doesn't cover.
For example, you can ask them the following questions about your personal policy:
- I want to earn some extra money as a driver for a food delivery driver. Would my auto insurance policy cover me if I had an accident?
- Are there exclusions in my policy that won't cover accidents if I'm driving for a food delivery company?
- If I have an accident while logged into a food delivery company, will that void my personal auto insurance coverage?
Get it in Writing
Finally, get their answer in writing. Whatever answer an agent gives, have him or her point out the language within your policy that supports their answer.
Ask for an email confirmation, then save a copy of this email in case any disputes arise in the future. Some agents may say you're covered, only to learn later that they were mistaken.
Your agent should be happy to answer any questions that you have. If not, consider finding an agent who will be more transparent.
Delivery Auto Insurance Options for Food Delivery Drivers
You should only need additional Delivery "Period 1" Insurance, which is different from Rideshare "Period 1" Insurance. Some companies call this "Courier" or "Pizza Delivery Insurance."
If you're in good standing with your car insurance company and already have collision and comprehensive coverage on your policy, these additional policies can provide adequate coverage. Make sure to speak with your local agent to confirm that your auto insurance covers courier services.
There are several options for insurance coverage for your delivery driving needs. Some of these products can also protect you if you're working for a grocery delivery service like Instacart.
Some rideshare policies offer riders, which specifically cover food transportation and delivery. Pizza and Food Delivery Insurance coverage protects drivers who work for on-demand food services or as a person making pizza deliveries.
Many restaurants ask their employees to have this coverage since most personal auto insurance policies don't cover accidents that happen during commercial food deliveries. If you don't have this coverage, it means you could be liable for any damages if you're in an accident.
Several car insurance companies offer these commercial policies. Some insurers add this optional coverage as riders to a personal auto insurance policy. They can raise your premiums by five percent, but the coverage is worth it if you get into a serious car accident.
State Farm Delivery Insurance: Select local agents offer delivery-only coverage that only covers those transporting food, excluding all passengers. Some rideshare policies also come with the option to add delivery service coverage.
Allstate Delivery Insurance: This insurer covers a select number of apps such as Uber, Lyft, and Ubereats. Coverage plans vary. They recently relaxed their policy terms, conditions, and exclusions for meal deliveries because of the COVID-19 emergency situation.
SmartFinancial can compare several companies that offer insurance for pizza delivery or other food delivery services.
Commercial Auto Insurance Policy Can Protect You
These policies can provide liability protection for vehicles used for business. They pay for any property damage or personal injuries you suffer in an accident. This coverage also pays for any third-party injury and property damage claims.
These policies tend to have higher coverage limits than personal policies because business vehicles need more protection if they're involved in an accident.
These policies cover cars, vans, pickup trucks and other vehicles. Do you need additional car insurance coverage to protect yourself while making deliveries?
SmartFinancial is a smart, fun, and easy way to shop for the car insurance coverage you need. We help insurance shoppers save money with our transparent insurance-technology platform.
Our tools will help you compare coverages in your local area that cover delivery drivers.
We'll find an agent who will best suit you. You'll only need to fill out one simple application, and you'll receive insurance quotes from multiple car insurance companies within a few minutes.
You'll get options to buy online, over the phone, or in person. We'll do all the hard work for you. Just enter your zip code to get started.