For many people, the ability to save time is important. That’s why convenience services such as Uber, Shipt, and Doordash are becoming increasingly popular. Even restaurants that offer delivery service, such as pizza places, are reporting more orders than ever. These companies make it simple to order a favorite meal, get a ride to the airport, or have an entire month’s worth of groceries delivered straight to your door.
Furthermore, many are realizing that working for this type of delivery program is a great way to make a flexible side income. While gig work can be an excellent method for paying off bills or saving up for a big purchase, there are some major pitfalls to consider. Namely? Your insurance coverage.
Thankfully, our team at Patriot Insurance Agency has put together a short guide. Keep reading to learn more about car insurance for food delivery and rideshare services.
You Might Be Surprised to Know Your Personal Auto Insurance Doesn’t Cover You
Here’s a fact you might be surprised by if you’re considering this type of side job. As a general rule, personal auto insurance doesn’t cover you against loss when you are engaged in business activities. What this means is if you’re using your car and insurance when driving for a delivery service, you’re likely not covered in the event of an accident. In turn, this leaves you open to have to pay for the damage to your vehicle on your own, plus any additional damage to the other car or other property. This is why it is important to make sure you have coverage in other ways.
Your Employer Likely Has Some Sort of Supplemental Coverage
It might sound scary to drive without insurance while working as a delivery driver, but it is important to realize that you likely have a minimum amount of supplemental coverage through your employer. If you work for a small restaurant, such as a pizza parlor, there’s a good chance they have what’s called hired and non-owned insurance. This type of policy covers you for liability and property damage if you’re involved in an accident while working for them. Also, most national ridesharing apps like Uber and Lyft, offer a small amount of supplemental coverage. However, it is usually only a third-party and doesn’t pay to fix any damage to your car.
Gaps in Coverage Could Be a Big Problem
However, it is important to realize that there might be a few gaps in coverage that could end up being a big problem. Non-owned and supplemental policies generally only cover your vehicle while you are actively delivering or transporting a fare—not while you’re waiting for your next assignment. This means that you could be without liability coverage at all, as your personal coverage is not in force while you’re using the vehicle for business use. This is called a gap in coverage, and it could be a big deal if you don’t address it with your local agent ahead of time.
How Carpooling Fits Into All of This
That said, many people wonder whether carpooling is considered business use and nullifies the personal auto policy. In most cases, the transportation of passengers is fine as long as you aren’t being paid, and they are people you know. For example, members of your child’s sports team or coworkers. There are still a few caveats to this and it is still a good idea to discuss it with your agent before carpooling regularly.
Get in Contact with Your Local Agent
It is important to remember that every personal auto policy contract is a little different, so it is always best to speak with your local agent before signing up as an Uber, Lyft, or another delivery driver. Having personal auto coverage without gaps is incredibly important and speaking with an experienced professional is always advised.
Of course, our Patriot Insurance Agency is here to help discuss the issue at hand. Get in touch with us today to schedule a no-obligation insurance coverage review.
