If you’re at the front line of takeout deliveries, you may need to protect yourself from spending that hard-earned money on car damage or injuries from a car accident. You may or may not get the coverage you need from your employer, and your personal policy may provide only some coverage if you drive for business purposes on a limited basis.
What types of car insurance do I need as a delivery driver?
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.
Warning: Personal car insurance might not cover you
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.
Business use coverage: Is a personal policy enough?
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:
It may not cover business liability — A personal policy probably won’t defend a business for liability in court if the business gets sued instead of the driver. You or your employer will need business liability insurance on another policy to provide this protection. This is a major point to consider if you own the business you’re making deliveries for, such as a catering company.
Different insurers have different exclusions — It’s best to talk with your personal car insurance company about your specific driving situation and get a response in writing, if possible. A representative can help you understand what your insurance company will cover and what it won’t.
You may need to specify this business use — You’ll need to give your insurance company a heads up that you use your vehicle for some business driving. That way it can tell you whether extra coverage is required for your situation.
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 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:
Property damage liability. You’ll need to meet at least your province or territory’s legal limits, which may differ from those driving for personal reasons.
Medical liability. Similar to the above, businesses often require much higher injury coverage.
Uninsured motorist coverage. You’ll get coverage for damage to your vehicle, injury or death if the motorist who hit you is uninsured. This type of insurance might be required as well.
Accident benefits/bodily insurance. Covers your healthcare after an accident including ambulances, nursing care and lost income.
Non-owned or hired auto. This may be provided by your company to cover you for liability while using your personal car, or if you drive a company vehicle for deliveries.
Comprehensive. Cover car damage from non-collision damage. That includes theft, vandalism, fire, flooding, earthquakes, hail or animal run-ins.
Collision. Most drivers add this physical damage coverage to repair their own car after an at-fault accident.
Delivery driver packages. Commercial insurers are used to customizing to each business, so you may find a specific delivery driver policy with some insurance companies.
How can I get full coverage car insurance as a delivery driver?
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:
Find out what your employer covers. Ask the company you work for how car insurance works if you get in an accident while driving for it. You’ll need to know specific types of coverage your employer has to cover your car. If you’re working for multiple delivery services, check the coverage provided by each company.
Investigate your personal policy. Speak with your insurance company about your work and whether your policy will cover any car accident damage. It might if you make deliveries on weekends or a few weeknights, but you use your car primarily for personal driving and commuting. You probably won’t be covered if making deliveries is your car’s primary use.
Fill in gaps with commercial coverage. Shop around for commercial car insurance that offers the right level of coverage. Common coverage you might need to fill in gaps includes underinsured motorist, collision, comprehensive or additional liability.
Include any extras that you prefer. Consider other situations not covered by your personal policy or company-provided coverage, like roadside assistance or rental reimbursement.
What extra coverage should I consider?
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:
Rental reimbursement. Better yet, get reimbursed for a rental car, so that you can keep making deliveries.
Roadside assistance. Get quick assistance for minor roadside needs that involve fuel delivery, battery jumpstart or flat tire changes.
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How car insurance works for pizza delivery drivers
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.
What do delivery services like UberEats and DoorDash cover?
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.
What types of accidents does insurance cover for delivery drivers?
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:
You hit a parked car in a crowded neighborhood.
You t-bone a car at an intersection.
You back into another car at an event or restaurant.
You sideswipe your car on a curb.
You rear-end a car in touch-and-go traffic.
How much more does car insurance cost for delivery drivers?
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:
Potential for risky driving. Delivery habits that could lead to an accident include speeding, sudden braking or cutting corners to rush deliveries.
Driving in an accident-prone area. Cities or crowded locations could bring a higher rate because of accident statistics in the area.
High mileage driving. Rural deliveries or full-time employment mean more time on the road.
Rush hour deliveries. High traffic and timely deliveries might lead you to an accident if you’re not careful.
Multiple claims. Making deliveries could mean multiple bumps along the way within the same term, which may lead to surcharges.
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.
Bottom line
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.
Questions about car insurance for delivery drivers
If you get into an accident while making a food delivery, your personal car insurance may not cover the damage, especially if you use your car primarily for deliveries. Insurers consider food deliveries to be a “business use” of your vehicle. In this case, you’ll have to rely on the coverage provided by your employer.
In many cases, your employer or delivery service coverage will pay for any damage it covers first. If you have your own commercial insurance, your policy should kick in after that for any damage you opted to cover (e.g.,physical damage to your car or damage caused by an underinsured driver). However, you can speak with your employer and insurance company to be certain about what’s covered and what isn’t.
Sarah George is a personal finance writer at Finder who’s spent the last four years wielding her digital pen on all things banking and insurance. Her know-how has been featured in such publications as CBS, CNET and Reviews.com, and she was a panelist in Finder’s 2020 money-saving webinar. Sarah earned an English education degree and is a Certified Educator in Personal Finance.
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