There’s no doubt that our lives are busy. Between work, school, household tasks, and getting the kids to sports practice on time, we are always looking for ways to make things a bit easier and more convenient. That’s why convenience apps like Shipt, Uber, and Doordash are so popular. They give us plenty of opportunities to get what we need when we need it without spending extra time. Even local restaurants are starting to see the value of offering delivery service.
Of course, some people also see this as a great opportunity to make extra money. Working as a delivery or rideshare service driver is a great way to pay off bills or save up for a great vacation. However, many people make the mistake of using their personal vehicle for this type of side job, which creates a problem in terms of auto insurance.
Here are answers to some of the most common questions regarding car insurance for food delivery and rideshare drivers.
Does My Personal Auto Policy Cover My Side Job?
If you’re working as a food delivery driver or for a company like Shipt, Instacart, Uber, or Lyft, you might think that your personal auto policy covers you while you’re on the job. The truth is that most individual car insurance does not remain in effect while engaging in business activities.
Why? There are special rules involved when it comes to commercial auto coverage due to an increased risk. Personal auto policies aren’t designed for this increased chance of an accident. Thus, there is typically no coverage when you’re working as a delivery driver.
How Does My Employer Help Protect Me While Working as a Delivery Driver?
There are a couple of ways your employer likely tries to protect you while you’re on the clock. The first is through what’s called hired and non-owned auto coverage. This means that you are covered with a basic amount of liability insurance through your employer while on the clock. However, it doesn’t typically pay for damage to your vehicle if you’re in an accident. Most major rideshare and delivery services also offer a form of basic supplemental insurance.
The problem with this is that there are sometimes gaps in coverage created. Most supplemental policies only cover you when you’re actually in the middle of a delivery or have a paying passenger in the backseat. Those times spent waiting on a new assignment or fare aren’t typically covered, creating a scary gap in coverage.
Does Carpooling Count as Business Use?
Another question we often get from clients is about carpooling. In simple terms, carpooling does not count as business use. However, there are a few caveats to this. In order for it to count as personal use, you must:
- Drive Someone You Know. This can be a coworker, friend, or even members of your child’s sports team.
- Not Receive Payment for Your Services. If you’re driving someone for payment, this is considered a business exchange.
If you start to charge payment or begin to carpool on a regular basis, it is important to talk to your insurance agent about your coverage options.
Should I Talk to My Insurance Agent?
The answer to this question is a resounding, yes! If you are thinking about working as a food delivery or rideshare driver, it is important to first talk to your local agent. Our team at Philleo Agency Insurance would be happy to help you review your current auto insurance policy and determine if there are any potential gaps in coverage before you get out on the road.