The huge potential for delivery services has been made even more apparent during the COVID-19 pandemic. The virus first made its way into American communities in early 2020; since the lockdown measures took place in March job loss has grown exponentially. And the delivery gigs that had taken hold before the pandemic claimed an important role in individuals’ efforts to earn money.
Delivery Drivers and Car Insurance
If you drive or park your vehicle on public roadways, it must be insured with the state’s minimum liability coverage. Typically, transporting goods in your car is not addressed in personal auto insurance guidelines.
But you still have options. A commercial policy covers businesses and their vehicles, and is usually a requirement of delivery companies. Livery insurance, or rideshare insurance, is a commercial auto insurance for for-hire businesses like Uber and Lyft that transport people. A business-use policy is an add-on to a personal policy when business use is minimal.
Driving Your Vehicle vs. the Company’s
There are differences depending on which car you drive, your personal auto or a company-provided vehicle.
When you drive a company’s delivery vehicle, delivery companies are liable. Violations will still show up on the driver’s driving record.
When you drive your own vehicle, keep in mind that most insurance providers won’t cover delivery drivers under a personal policy because the risk is higher with businesses. Insurance companies won’t cover any losses that occur while you are using your car to deliver for a fee.
Insurance for Delivery Drivers Requirements
As a delivery driver you can:
- Purchase a commercial insurance policy
- Ask your insurance provider if they will add business-use coverage to your plan.
- Ask your car insurance company it they offer rideshare coverage as an add-on. A for-hire livery policy, traditionally reserved for taxi or limousine services, is usually more expensive because it is not exclusive to rideshare drivers.
- Fail to report your occupation to your insurance company, (NOT RECOMMENDED) but you run the very real risk of being found out, at which point your coverage could be cancelled or any subsequent claims denied
Any damage to the vehicle while driving goods is the responsibility of the driver, but the delivery company might help out when a driver’s policy does not cover repair of damages caused by third-party vehicles.
About State Minimum Requirements
Most delivery companies require drivers to carry auto insurance that meet the minimum liability coverage required by the state. In reality, this is typically lower than what might be needed by the drivers.
State coverage minimums are usually 100/300/100:
- $100,000 for bodily injuries per person
- Up to $300,000 per accident
- $100,000 for property damage
Do Companies Provide Car Insurance for Delivery Drivers?
Companies that employ delivery drivers may provide insurance policies, but the details can vary widely. Here are some examples of employers’ car insurance policies.
The company’s commercial insurance covers drivers up to $1 million for bodily injury and property damage if an accident is the driver’s fault and the driver still has the order being delivered at the time. But, the DoorDash insurance is an excess policy, so if you are at-fault in an accident while on a delivery, the company only comes into play after your personal insurance coverage is depleted. If you don’t have car insurance DoorDash will not cover you.
Drivers are required to have their own car insurance and GrubHub does not provide drivers with commercial auto insurance.
Drivers are responsible for purchasing their own car insurance that meets legal requirements. These can include no-fault liability of commercial liability.
Drivers must have their own personal car insurance policy that meets at least the minimum coverage required by the state.
You must have your own auto insurance as a driver, but the company offers “excess” coverage of up to $1 million in liability coverage per accident, for property damage as well as injuries you cause to others.
All drivers are offered a commercial auto insurance policy in every state except New York. This liability coverage of up to $1 million from the moment the assignment is accepted to when the delivery has been made.
If you have collision and comprehensive coverage, Uber will offer car repairs when your car is damaged while you are on an assignment with a $1,000 deductible.
Uber’s commercial policy includes up to $50,000 for bodily injury for each injured person, per accident. It also offers up to $100,000 for bodily multiple people in a single accident as well as $25,000 for property damage due to an accident.
Note that during the pandemic, many insurance providers have temporarily changed some of their rules to accommodate a quickly changed market.
For a more in-depth look at how rideshare companies break down the benefits of the insurance they provide, see this informative article.
During the Pandemic
With so many people turning to deliveries, to make a living or to get the goods and food desired to the front door, the number of individuals becoming delivery drivers has exploded. As a result, many state insurance commissioners have added temporary relief measures to their guidelines. For example, auto insurance companies in some states are required to temporarily cover delivery services on drivers’ personal policies and restaurants’ liability policies at no additional charge.
National Association of Insurance Commissioners offers a map graphic to help you find your state insurance commissioner website. You’ll find a lot of good information including pandemic guidelines if available