You’ll need to have at least the minimum amount of coverage required by your province or territory, like third-party liability insurance, to be legally allowed to drive on the road in any capacity. The company you work for may require you to have additional coverage as a delivery driver. The safest type of coverage for delivery drivers will include comprehensive coverage.
In most cases you’ll need to add extra coverage or a take out a separate commercial car insurance policy, depending on how you’re classified as a worker and how often you make deliveries.
It’s easy to think that if you’re using your personal vehicle for deliveries, your personal insurance policy is enough to cover you. Unfortunately, insurance companies view driving for business purposes as a higher risk than driving for personal reasons. Without commercial car insurance, your insurance company could deny your claim or even cancel your policy altogether if you get in an accident while making a delivery.
Some personal car insurance policies provide limited coverage if you make deliveries as a side hustle. While this may work for drivers who deliver on a very limited basis, there are a few concerns with relying on your personal policy:
Your personal policy won’t cover you if you use your car primarily for business driving. Consider whether you use your car for deliveries a majority of the time. If most of the mileage you drive on that car is delivery-related, it probably needs a separate commercial policy.
Commercial car insurance policies work best for drivers who own a delivery business or those who need extra coverage not provided by your employer. You can buy a policy with all the standard coverage for deliveries or add coverage that’s missing from a company-provided policy. What to look for:
Types of car insurance coverage
If you work for an employer or delivery service company like UberEats or DoorDash, you likely have some coverage offered through that company. But getting enough coverage can mean a bit of patchwork, matching up the coverage your company provides and other coverage you need.
Steps to finding and buying the right coverage:
Even if your employer provides some insurance, you may not have all the coverage you’d prefer for your car. Consider supplementing with your own coverage for wider protection:
If you work for a pizza restaurant, your employer should have some business insurance to cover your delivery driving. You might ask how insurance will work should an accident happen with you at the wheel. If your restaurant doesn’t cover certain damage or vehicle breakdowns, you can look at how your personal policy covers those situations.
Each delivery service provides a different amount of coverage. Even if your company’s coverage fulfills minimum state requirements, you may want extra liability or add-ons for wide protection of your vehicle.
For example, DoorDash excess liability coverage for injuries or property damage that kicks in after you exhaust your own auto insurance. It doesn’t take responsibility for your own car’s damage.
On the other hand, UberEats provides liability coverage of up to $2 million and will take care of comprehensive and collision if you have it on your personal policy. But both companies offer reduced or no coverage while waiting for an order.
Food delivery can keep you on your toes with quick deliveries and a variety of driving situations. In many delivery-related accidents, you may find that property damage, bodily injury and collision coverage come in handy.
Scenarios that can get coverage from a commercial policy:
A typical commercial car policy could cost you $1,000 to $1,500 per year if you’re getting a full suite of coverage for liability, comprehensive and collision. However, you might pay only $600 extra if you’re supplementing your employer’s coverage.
Since many variables are involved here, like what your employer covers, your premium can vary considerably compared to other businesses. Factors that affect your delivery driving insurance rates include:
Important note
You could cut down on some of your vehicle expenses when filing your taxes. The CRA allows drivers to deduct costs like gas, insurance or car repairs if you use your car for business purposes. Be sure to check with your accountant to see if you’re eligible.
If you’re a food delivery driver or caterer, you need car insurance like everyone else. But a personal policy or an employer’s policy might not provide all the coverage you need.
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