Insurance Coverage and Accident Protection for Food Delivery Workers

Dani Milton
April 30, 2020

The COVID-19 pandemic has caused an unexpected economic downturn that has left millions unemployed. It has made gig work, like food delivery, a tempting way to earn extra money. The demand for these services have skyrocketed because many people have to remain indoors due to stay-at-home orders.

Delivery food services such as Postmates, Grubhub, Uber Eats, and DoorDash have had more customers 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, they also come with a few risks. If 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 insurance coverage. We'll tell you which insurance coverage you'll need to protect yourself as a food delivery worker.

Personal Auto Insurance Policies Don’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. 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 delivery driver, an accident will not only harm your physical health; it can also set you back financially. So, you need great insurance to protect your future.

Unfortunately, many on-demand delivery services haven’t told their delivery partners everything they need to know to protect themselves. Although these companies require drivers to carry personal auto insurance, these policies don’t cover cars used for commercial purposes, like meal deliveries.

Most couriers learn that they are unprotected when it’s too late, after they get into a traffic accident. They discover their insurers 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 insurance company denies your claim, you’ll have to pay for any accident-related costs out-of-pocket.

You can’t rely on the company’s commercial coverage, either. It will only kick in after you’ve used up your auto insurance. Additionally, their policies only settle third-party claims. They won’t pay for your property damages. If you don’t have the right coverage, 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 your insurance company about making a meal delivery 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. They 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 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.

Company Insurance Policies for Delivery Drivers

Before starting your 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 insurance policies that most popular food delivery companies provide for their couriers:

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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. Their 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 workers. So, if you have an 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. Another thing to remember: DoorDash’s 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.

Unfortunately, personal auto policies don't cover damages that drivers sustain during deliveries and other commercial activities. If the terms and conditions exclude these activities, your insurance company will deny your claim. If you don’t have the right coverage, you’ll have to pay for these expenses out-of-pocket. You’ll need commercial auto insurance to be fully insured.

On June 27, 2019, DoorDash began offering an optional occupational accident insurance policy 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 insurance policy doesn’t cover every scenario that food delivery drivers may experience on the road, so it may not be enough to cover your medical expenses. It’s wise to spend the extra money upfront to get the right coverage to protect yourself and your family.

What Insurance Coverage Does UberEats Offer?

UberEats is an online food ordering and delivery platform based in San Francisco. Last year, UberEats launched a new commercial insurance policy that provides $1 million of liability coverage per accident.

It offers coverage similar to its rideshare program, which begins from the moment you accept an order until you complete delivery. Their policy will only reimburse any third-party liability claims against its drivers. It doesn't cover any property damages that your vehicle sustains.

UberEats also offers a contingent comprehensive and collision insurance during the delivery process. It’s only available to drivers that already have comprehensive and collision coverage so it’s wise to buy full coverage auto insurance.

You’ll need to exhaust your 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 a commercial auto liability insurance policy for delivery partners. It 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, this 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 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 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’ insurance policy provides excess coverage for third-party property damage and bodily injury claims only. Again, most car insurance policies won’t pay for property damage you receive in an accident related to gig work unless you have commercial auto insurance. They 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.

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 insurance coverage for its delivery partners. That’s right: you’re on your own if an accident happens.

If 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. Although they require drivers to have personal auto insurance coverage, these policies don’t cover accidents that occur during commercial deliveries. You’ll need commercial auto insurance to be fully insured.

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 coverage while you’re on the clock:

  • 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 policy is not available for New York drivers who must purchase commercial auto insurance coverage.

Ask Your 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 auto insurance policy will automatically cover these accidents. Your coverage may still contain language that forbids coverage of commercial-related claims.

Start your courier business off on the right foot by making sure you have enough coverage insurance to protect yourself.

First, read your policy. Here, you can find out whether your current insurance policy excludes the coverage of commercial work. Download a current copy of your policy’s terms and conditions. Use the search feature in your word processing /PDF program, and search for exclusion terms like “delivery,” “commercial,” or “livery”.

Next, 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.

Third, ask your insurance agent about what your insurance policy does and doesn’t cover.

For example, you can ask them:

  1. 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?
  2. Are there exclusions in my policy that won’t cover accidents if I’m driving for a food delivery company?
  3. If I have an accident while logged into a food delivery company, will that void my personal auto insurance coverage?

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 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 and Food Delivery Insurance.”

If you’re in good standing with your 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 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.

Rideshare Insurance

Some rideshare policies cover offer riders, which specifically cover food transportation and delivery. Pizza and Food Delivery Insurance: This coverage protects drivers who work for on-demand food services or as a delivery person for a pizza shop. 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 companies offer these commercial policies. Some insurers add this optional coverage as riders to a personal 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.

Geico Delivery Insurance: This insurance will cover drivers working for many on-demand apps, including DoorDash, Postmates, GrubHub, and other states. Coverage is available in the following states: AL, AZ, CT, CO, DE, DC, GA, ID, IL, IN, IA, KS, LA, ME, MD, MN, MS, MO, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI, and WY. New York only allows for food-delivery-only policies.

Progressive Pizza Delivery Insurance: Progressive offers an insurance policy that protects delivery drivers during accidents when delivering food.

Commercial Auto Insurance Policy

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 insurance coverage to protect yourself while making deliveries? SmartFinancial is a smart, fun, and easy way to shop for the insurance coverage you need. We help insurance shoppers save money with our transparent insurance-technology platform.

We’ll help you compare coverages in your local area and 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 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.

Get a Free Auto Insurance Quote Online Now.

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