If you’re going to work for a food delivery app or directly for a restaurant, you need to understand how insurance works. Food delivery can be a great way to make money, but you don’t want an accident to wipe out your life savings. Keep reading to find out what you need to know about car insurance for food delivery drivers.
What are Food Delivery Drivers in the Eyes of Insurance Companies?
There are a few different types of delivery drivers. Some are employees of restaurants. Others work for apps and other third-party services that contract with one or more restaurants. These drivers may be employees or independent contractors. They may also be full-time workers or doing it as a side gig.
What delivery drivers almost always have in common is that the insurance companies see their work as a business activity. This means that personal car insurance may not cover delivery driving.
Why Doesn’t Personal Car Insurance Cover Delivery Driving?
Personal car insurance policies are designed for personal use. Insurance coverage groups people with similar risks together. Someone who does one commute per day plus some weekend trips has a much different risk than someone who is driving almost all day every day.
Your personal car insurance policy will almost always have an exclusion that says business uses are not covered. In some cases, the insurance company may even cancel your policy if they find out your car is being used for business purposes to avoid the risk of a claim dispute over whether you were driving for personal or business reasons at the time of the accident.
What Happens if You Cause an Accident While Delivery Driving?
If you cause an accident while delivery driving, you would likely be responsible for paying the other drivers for their injuries and damage to their car. For normal personal driving, your personal car insurance will handle the claim. When you’re delivery driving, the claims process is the same but only if you have insurance that applies.
If you only had a personal policy that excludes business activities, you’d probably have to pay out of pocket, may have to sell your house, and could have your wages garnished. If you had some type of business coverage, the insurance company would pay covered claims up to the policy limits on your behalf.
What are Your Options for Business Insurance Coverage?
You have three options to make sure your business activities are covered.
- Employer’s non-owner and hired policy. Your employer may carry insurance for you. The pro is that you don’t have to pay. The con is that this option is most likely to have gaps. For example, many employers will buy liability coverage so they don’t get sued, but they won’t carry coverage for damage to your own car.
- Option on your primary insurance policy. Some personal car insurance companies now allow you to add business coverage to your personal policy at an additional cost. This is often cheaper than a separate business policy but may have limits that don’t work for full-time business activities. However, it’s often a good option for side gigs.
- Commercial car insurance. You also have the option of purchasing commercial car insurance. It provides similar protections to personal policies but covers business activities. Rates may vary based on your type of business and how much you work.
To learn more about your coverage options or to check if you have gaps in coverage, talk to Wolfgram Insurance.
