Auto Insurance: Delivery Drivers Covered?

Delivery drivers need to be aware of the auto insurance policies provided by their employers, as well as their own personal insurance policies. While some companies like Doordash, Uber Eats, and Amazon Flex offer insurance coverage for their drivers during deliveries, this may not be the case for smaller, local restaurants. It's important to understand the limitations of your employer's insurance policy and fill in any gaps with your own insurance, as you could be held personally responsible for accidents that occur while on the job.

What is the best insurance for delivery drivers?

Delivery driving has become an increasingly popular job in recent years, with the U.S. Census estimating that there were 1.6 million delivery drivers in the U.S. in 2021. This figure is expected to increase by 11% by 2031. However, delivery driving can be risky, and it's important to ensure you have the right insurance in place.

Delivery driver insurance is a type of car insurance that protects you while working as a food delivery driver. It is technically a rideshare endorsement that you add to a standard car insurance policy. Most personal auto policies do not cover losses incurred while working, so delivery drivers need to get this insurance to avoid severe liability for themselves and their employer.

Yes, you need to alert your insurer that you work for a rideshare or food delivery company. Your rates may or may not go up, but it's important to check. Auto insurance does not typically cover commercial use of your vehicle. If you don't have delivery driver insurance, your accident claim will likely be denied unless you notify your insurance company beforehand and get the proper coverage.

Some companies, such as Uber Eats and Amazon Flex, offer coverage during deliveries for their drivers, but this depends on the company. If you're driving for a small, local restaurant, it's unlikely that the owners have purchased driver coverage.

No, you cannot use your personal car insurance unless your policy has a special provision for delivery driver coverage. Personal auto insurance policies do not cover individuals for any business use, including food or pizza delivery. If you're in an accident while on the job, it's up to you and your provider whether they'll pay or refuse all claims.

If a delivery driver has an accident, their policy will be tested and may fail if they have only the cheapest state-minimum liability policy. Even a minor accident can result in insurance claims that exceed limits as low as $15,000 per injured person and $5,000 in property damage.

You need more liability insurance protection than state-minimum requirements. Ideally, purchase 100/300/100 coverage limits—$100,000 for bodily injuries per person, up to $300,000 per accident, and property damage coverage of $100,000. Ask your employer and personal insurance company about their coverages and exclusions.

There are several types of delivery driver insurance:

• Business-use auto insurance: This type of policy is designed for people who use their car for specific and limited business purposes. If you are involved in a collision that is your fault, the insurance company will take care of everything.
• Personal auto insurance: Before using your personal vehicle for food delivery, ensure you have proper coverage. If you're at fault in an accident without the right amount of coverage, you must pay for the damages out of pocket.
• Car insurance through your employer: If you have insurance through your ridesharing company, they will cover you in case of an accident within their policy limits. However, if any damage exceeds their policy limit, you must pay for those expenses.
• Hire and reward insurance: This is a type of specialist insurance for drivers who deliver food or parcels for a living.

The cost of delivery driver insurance varies depending on factors such as your delivery type, provider, and coverage type. Adding rideshare coverage will increase your insurance rates by 15% to 20%. You could also get commercial auto coverage in addition to personal coverage, which is more expensive than a personal liability plan because insurance companies deem it more high-risk.

Delivery driver insurance is a necessary expense if you drive your own car for deliveries. If you get into an accident while delivering food and don't have the proper insurance, your insurance company could reject your claim. It's important to shop around for the best policy and update your insurer when your needs change, such as adding a rideshare endorsement.

What is the cost of delivery driver insurance?

The cost of delivery driver insurance depends on several factors, including the type of delivery, the provider, and the level of coverage. It is recommended that delivery drivers have a commercial auto insurance policy as food delivery is considered "business use" of a vehicle, which is deemed higher risk than personal use.

Adding rideshare coverage to an existing insurance policy can increase costs by 15% to 20%. Progressive, State Farm, and Nationwide offer delivery driver insurance starting at $33 per month. USAA, a membership-only insurance company catering to military personnel, also offers delivery driver insurance, but it is only available to active-duty and retired military service members and their families.

The cost of delivery driver insurance also depends on the driver's age, location, and type of vehicle. For example, younger drivers in big cities with high auto theft rates will pay more for insurance.

Some companies, like Uber Eats and Amazon Flex, provide coverage for their drivers during deliveries. However, this coverage may not apply during the entire delivery process or when the driver is waiting for a delivery request. It is important for delivery drivers to understand the limitations of their employer's insurance coverage and ensure they have adequate personal insurance to fill any gaps.

In summary, the cost of delivery driver insurance varies but generally involves higher premiums due to the increased risk associated with business use of a vehicle. Delivery drivers should carefully review their insurance policies and consider adding rideshare coverage or purchasing a commercial auto insurance policy to ensure they are adequately protected.

Does delivery driver insurance cover personal vehicles?

If you're a delivery driver, it's important to understand the coverage provided by your auto insurance policy. Most personal auto insurance policies do not cover delivery drivers without additional coverage add-ons. This means that if you get into an accident while delivering food without the proper insurance, your insurance claim may be denied, leaving you to pay for any damages and medical bills out of pocket.

If you're using your car to deliver food, it's recommended that you purchase delivery driver insurance or rideshare insurance as additional protection. This type of insurance is typically offered as an add-on to your personal car insurance policy and will cover you while you're between deliveries or waiting for an order, which is when most delivery companies won't cover you.

Some delivery companies, like Amazon Flex and DoorDash, offer commercial auto insurance policies that cover drivers during "active delivery" time. However, these policies often have limitations and may not cover you if your personal insurance policy denies a claim.

To ensure you have the right coverage, it's best to contact your insurance agent and research your company's insurance policies.

What happens if I don't get delivery driver insurance?

If you don't get delivery driver insurance, you could face a number of consequences, both financial and legal.

Financial Consequences

If you're in an accident and don't have the right insurance, you may have to pay for property damage and medical bills out of pocket. You could also be liable for compensation, including repairs to your vehicle, medical expenses, and damage to other people's property.

Legal Consequences

In many places, it is illegal to drive without insurance. If caught, you may be fined and given penalty points on your driving license, or even face a driving ban. Your vehicle may also be impounded, and you could face difficulties getting your vehicle back or obtaining insurance in the future.

Employment Consequences

If you are an employee, your employer could also face legal consequences and may be prosecuted for allowing you to drive without insurance. If you are a freelancer, your clients may refuse to work with you again and could sue you for any losses or reputational damage resulting from your failure to deliver as contracted.

What to Do

To avoid these consequences, it is essential to have the proper insurance coverage before starting a delivery driver job. Contact your insurance provider to add a delivery driver endorsement to your policy or to purchase a separate commercial policy. This will ensure you are protected in the event of an accident and help you avoid legal and financial troubles.

What is rideshare insurance?

Rideshare insurance is an additional type of insurance coverage that fills in the gaps left by the limited commercial insurance policies provided by ridesharing companies like Uber and Lyft. While these companies usually offer some insurance coverage for their drivers, it often only applies during specific periods, such as when a driver is assigned a customer or is in the process of picking them up. Rideshare insurance covers drivers during the periods when they are not covered by their employer's insurance or their personal car insurance policy, such as when they are logged into the app and waiting for a ride request.

Rideshare insurance is typically offered as an add-on to a driver's personal auto insurance policy. It is not usually included with standard auto insurance coverage and may not be available in all states. The cost of adding rideshare insurance varies depending on factors such as the driver's location, age, vehicle, and driving history.

Rideshare insurance is designed to provide financial protection for drivers who are using their vehicles for business purposes, whether that be transporting passengers or delivering food and packages. It covers liability for bodily injury and property damage, as well as additional coverages like roadside assistance and rental car reimbursement.

Some insurance companies may require drivers to purchase a commercial auto policy instead of, or in addition to, rideshare insurance. This is typically more expensive but may be necessary to ensure adequate coverage, especially for drivers who use their vehicles for business purposes regularly.

It is important for drivers to understand the limitations of their employer's insurance and their personal car insurance policy and to consider adding rideshare insurance to fill in any gaps in coverage. Without adequate insurance, drivers may be left financially vulnerable in the event of an accident or incident while working.

Frequently asked questions