We all know that one of the most popular ways to make extra money these days is to deliver food for companies such as DoorDash, Postmates, or Grubhub. Here’s something you might not already know: using your vehicle for business or transportation of goods is not usually covered by your personal auto insurance. If you decide to take on this “side hustle” you will need to secure a commercial auto insurance policy as well.
Is a Special Form of Insurance Mandatory as a Delivery Driver?
Drivers are required to insure any vehicle that is driven or parked on public roadways with state-minimum liability coverage. Without this coverage, you could suffer a ticket or even a license suspension if you were to get in an accident, as well as any costs incurred by the accident itself. Many delivery companies require that you must maintain or exceed the liability limits in your state.
Since delivery drivers use their vehicles to transport goods such as food, making deliveries typically falls outside of personal auto insurance policy guidelines. If an accident occurs while you are working your delivery job, you could risk having claims regarding the incident denied.
As an example, here are two forms of coverage that we think work well for Postmates:
- Business Use: this would be an add-on to your existing policy, and is designed for minimal business use.
- Commercial Policy: this is a form of coverage designed specifically for businesses and vehicles of daily use.
Can I Secure Coverage From my Place of Employment?
This varies on the type of business, but Postmates is a good reference point. Postmates clearly states that responsibility for vehicular damages will always be the burden of the driver, but their official platform may step in when a driver’s coverage does not take care of the damage that occurs on third-party vehicles. Postmates’ form of assistance includes:
- Excess auto liability – $1M per accident limit for bodily injury and property damage to third parties.
- General Liability – $1M applies to Postmates couriers who deliver by bike or on foot, and have inadvertently caused damage to others or their property.
What Kind of Options are Available for Delivery Drivers?
Working as a food delivery driver is a great way to earn money while you are in school, or to supplement your household income, especially if you’re feeling the effects of inflation. You have options: acquire a commercial auto insurance policy, inquire about adding coverage with a business-use personal policy or (and this is NOT recommended by all of us here at the Alexander Insurance Agency of St. Charles) you could decide not to report your occupation to our team.
A Commercial Policy can be slightly more expensive than a personal policy, with the cost based on your vehicle and other geographical factors. This is the most extensive form of coverage, but you can rest assured that most any incident you encounter will be covered.
A Business Use Policy is designed specifically for drivers who use their vehicles for limited business use. It can be very convenient if you only deliver part-time, but it might not work for you if you deliver full-time, or if you only deliver seasonally. Make sure you contact us to find out if you qualify for this type of coverage.
A Personal Auto Insurance Policy
If you choose not to report your delivery occupation to us (or your insurance provider), you face some massive risks! You could have your coverage canceled and/or any ensuing claims denied. The safest bet is to let us know and we’ll help you secure the coverage that works best for your situation.
What is a Rideshare Insurance Endorsement?
Coverage for delivery drivers looks a little different depending on your provider. For instance, Geico offers a Hybrid Rideshare Insurance option, which covers instances of personal use and during your delivery hours. Progressive, State Farm, USAA and Allstate, for example, also offer great options for delivery drivers, just a bit differently. Give us a call and we can further discuss your options with you. If you’ve recently started a rideshare or delivery job, the team here at Alexander Insurance Agency of St. Charles is ready to help! Give us a call and we can further discuss your options, and provide you with our recommendations for the coverage that is best for you!