Car insurance for delivery drivers guide

What is delivery insurance for drivers?

Whether it’s your full-time job or a side hustle, delivery driving is gaining in popularity. You probably have a personal car insurance policy that covers your vehicle because your state requires you to carry coverage. You might think your current policy is enough to cover you for business purposes, like making food and goods deliveries.

But did you know that your personal auto insurance may not cover your delivery driver gig? Most, if not all, insurance companies won’t cover you when you use your car for a business purpose or while transporting goods, including food.

Delivery drivers spend a lot more time on the roads than a typical commuter. Since you’re driving more, that increases your chances of getting into an accident. You want to make sure you’re covered in case that happens.

This delivery driver car insurance guide will help you better understand personal auto policies, their limitations and what kind of auto insurance policy is best for your specific needs as a delivery driver.

What kind of car insurance do delivery drivers need?

Many drivers will find they need a personal auto insurance policy — plus commercial auto insurance — to be adequately covered.

Why two policies? Can’t one policy provide delivery driver insurance?

If you occasionally use your personal vehicle to run errands for your job — or to drive to and from appointments — a business-use endorsement on your personal policy may be enough. This endorsement can provide insurance coverage if you get into a car accident while driving for work-related reasons.

But business-use add-ons don’t cover making deliveries or transporting goods or people. Unless the endorsement is specific to the type of delivery service you provide (more on this later), don’t expect it to offer the insurance coverage you need.

If you deliver goods or are a food delivery driver, a commercial car insurance policy is a good option for you. A commercial policy will provide liability insurance for bodily injury or property damage you cause to others while working. You’ll also typically get higher liability insurance limits, which provides greater financial protection if you cause an accident.

A commercial auto insurance policy can also provide comprehensive and collision coverage to protect your vehicle. Add-ons like roadside assistance can vary by insurance company.

A personal insurance policy will cover all other driving purposes for personal use. Though it might seem like you’re doubling up unnecessarily on insurance coverage, having both policies prevents a coverage gap that could threaten your and your family’s financial security.

Beware the rideshare insurance gap

Like food delivery service drivers, rideshare drivers can sometimes fall into an insurance gap if they assume their personal car insurance covers them while they work. Once drivers turn on their rideshare app, in most cases their personal auto coverage stops.

Rideshare companies such as Lyft and Uber typically offer limited commercial insurance for independent contractors using their own car to transport customers. The rideshare company’s commercial auto insurance coverage usually covers drivers from the moment they accept a passenger’s ride to the time they drop them back off.

Do you see the gap? In this scenario, the rideshare company’s policy will not provide coverage from the time the mobile app is turned on to begin work until prior to accepting a job: a ride with a passenger. So what do you do?

Luckily, many personal insurance providers offer a rideshare endorsement to add to your standard policy that can provide this coverage. However, keep in mind that you’ll only have collision and comprehensive coverage if it’s included in your existing policy. The rideshare endorsement is designed to extend specific existing coverages, not to provide additional coverage.

Where to get car insurance for delivery drivers

Here are a few car insurance companies offering coverage for delivery drivers:

• Allstate: The Allstate Ride for Hire endorsement can be added to your personal auto policy to extend coverage. It will also provide up to $2,500 additional coverage if your vehicle is damaged after you’ve accepted a trip. Although your employer’s commercial policy may also be in effect during this time the plan may have high deductibles, and this additional coverage can help offset any out-of-pocket expenses.
• Progressive: The Progressive rideshare insurance endorsement will cover both rideshare and food (and/or goods) delivery drivers in most states. It extends your personal insurance coverages and offers deductible reimbursement if the rideshare company’s insurance deductible is higher than your personal insurance plan.
• State Farm: The rideshare driver coverage from State Farm will extend existing policy coverage on your personal vehicle while you are active on the app for the rideshare company. (Note: This endorsement does not appear to cover delivery driving services.)
• USAA: The rideshare gap protection coverage from USAA extends personal insurance coverage to both app-based rideshare drivers and delivery drivers. (Note: This add-on is not available in Hawaii, North Carolina, Michigan, Montana, New Mexico, New York, South Carolina or Virginia.)

Coverage can vary by state and insurance company. You may be required to carry higher liability limits in order to be eligible for a rideshare coverage extension. Most insurers offer a free quote to determine how much it will cost to add the endorsement. Make sure you understand the conditions and limitations before buying.

If you don’t have a personal policy or your delivery company doesn’t offer rideshare or food delivery insurance coverage, it may be worth getting a business auto insurance policy. Next Insurance offers instant quotes online, and you can buy your policy online, too. From pizza delivery to flower delivery, Next can protect your small business from risks that your personal insurance plan doesn’t cover.

What are the car insurance policies for delivery services?

Auto insurance from delivery companies varies, depending on the company. It’s important to read the company’s commercial insurance policy carefully to see if it provides adequate coverage. It’s also a good idea to speak with an insurance agent to discuss your coverage options.

Postmates

Postmates, now owned by Uber, offers third-party liability coverage of $1 million while you’re picking up deliveries or transporting people. Third-party liability coverage is the same type of liability coverage you can get on your personal policy: It covers you when someone makes a claim against you for bodily injuries or property damage you cause.

If you have comprehensive and collision insurance on your personal policy, Uber will also extend your comprehensive and collision coverage. The deductible is high ($2,500), so it may be worth getting rideshare gap coverage from an insurer like Allstate or Progressive with deductible protection.

If you don’t have rideshare coverage, Uber provides minimal liability protection (up to $50,000 per person you injure, up to $100,000 in injuries per accident and up to $25,000 in property damage per accident) while you’re waiting for a gig. This coverage may in fact be lower than the liability limits on your personal auto insurance policy. (Note: Uber does not cover New York delivery drivers.)

GrubHub

GrubHub does not offer insurance to its delivery drivers. If you work for GrubHub (or are interested in working for them), you should get commercial auto insurance for delivery and rideshare drivers.

DoorDash

‌DoorDash requires Dashers to maintain primary car insurance coverage that meets their state’s requirements. It will provide up to $1 million in liability insurance only during the “delivery service” period: from accepting a request until the order has been delivered, canceled or unassigned. To be eligible for coverage if you file a claim, you must first submit a claim to your auto insurance company and receive a denial letter.

(Note: North Dakota Dashers are also covered during the “delivery available” period — any period you are working but have not yet accepted a job and are not actively transporting a passenger. This period is not covered by the insurance policy that the rideshare company provides drivers, and it is not covered by personal auto insurance policies; it is the gap most rideshare endorsements cover.)

Instacart

Like GrubHub, InstaCart does not provide car insurance coverage. Drivers are considered independent contractors. As an independent contractor, it may be a good idea to purchase commercial car insurance to supplement your personal insurance coverage.

Amazon Flex

Amazon Flex provides liability, contingent comprehensive and collision coverage, and uninsured motorist coverage for drivers in all states except New York.

Amazon Flex’s coverage only applies during active delivery time, and you must have a personal insurance policy covering your delivery vehicle. A rideshare endorsement added to your personal policy may cover this gap.

Domino’s Pizza

Domino’s Pizza works as a franchise, meaning each location is independently owned. Domino’s does not provide delivery driver auto insurance, though individual location owners may elect to provide auto insurance to their drivers. A qualification to become a Domino’s delivery driver is insurance coverage.

Adding a rideshare or delivery endorsement to your personal policy may be sufficient. Still, it’s worth discussing with your insurance agent to ensure you have the right policy to meet your unique needs.

Uber Eats

The Uber Eats insurance policy is the same as the Postmates insurance policy, because Uber owns Postmates. Uber will provide up to $1 million in liability coverage, but comprehensive and collision are available only if you’ve purchased those coverages on your personal policy.

Uber will also provide uninsured/underinsured motorist, medical payments or personal injury protection (PIP) coverage if you or your passengers are injured by another driver who doesn’t have enough coverage.