A Car Insurance Guide for Delivery Drivers

Food delivery and ridesharing are great ways to earn extra income. The market for food delivery has increased as restaurants have had to adapt to COVID-19 precautions, and just about everyone could use some extra income as we continue to navigate life during a pandemic.

If you’re considering joining a food delivery or rideshare company as a driver, you need to be sure you have the right insurance coverage. If you’re in an accident, you want to be able to replace your car or fix it so you can keep working.

As you review your car insurance, here’s what you need to know:

You have a coverage gap

Rideshare and delivery companies offer some insurance coverage while you are on your way to pick up passengers or food and while you are transporting passengers or food. However, when you have your app on and are waiting to accept a delivery, neither your personal car insurance or your rideshare company offers coverage.

If you are in an accident while you’re waiting to accept a job, you won’t have any insurance coverage. You’ll be on your own for covering the resulting costs and may have to deal with other issues.

Look for an insurance policy to cover the gaps

To protect yourself and cover this gap, you’ll want to purchase an additional policy or a policy that adds rideshare coverage to your personal policy. These policies and riders are commonly called rideshare insurance. However, they are commercial auto coverage policies that offer insurance coverage when you use your car for business.

Choose a reliable and highly rated insurer for your policy. Check the insurer’s financial strength to gauge the company’s financial stability and ability to make claims payments. Reading customer reviews can give you a sense of the customer experience with the insurer, which can also help you find a good company.

As you shop for policies or riders that can be added to your personal auto coverage, you can use companies like Policygenius to compare policies across multiple insurers. The ability to compare quotes and policies quickly and efficiently makes it easier to find a good deal. This can also be beneficial if you’re also shopping for personal auto insurance coverage.

Before you buy a policy, understand how it works:

What is the deductible? This is the amount you’ll pay before the insurer starts to pay for covered damage.
How much is the premium? This is the monthly fee you pay for insurance coverage.
Does the policy have a benefit maximum? This is the most an insurer will pay. Once this limit is reached, the rest of the expenses are your responsibility.
What coverage is offered—collision, liability, comprehensive, medical payments, income loss, etc.? Car insurance policies are highly customizable because you can choose how much and what kind of coverage to buy.

Car insurance requirements vary by state. Liability coverage for property damage and physical injury is most commonly required. Some states require additional coverage for uninsured or underinsured motorist insurance or Personal Injury Protection (PIP). PIP coverage offers coverage for lost wages according to your policy’s terms.

Making a claim for lost wages will depend on whether your state is an at-fault or no-fault state. You may need to file a claim with the other driver’s insurance, use your uninsured or underinsured motorist insurance, or PIP coverage.

Keep in mind that you typically have to have the same level of coverage on your personal insurance as you do with your rideshare coverage. Knowing the cost and kind of protection offered by your policy will help you find one and choose coverage that will meet your needs.

Communicate with your personal car insurance carrier

If you’re driving for hire and do not communicate that to your car insurance company, you could lose your coverage. Insurers can end your policy and no longer offer you coverage if you don’t communicate clearly about your car usage.

While communicating and getting commercial auto coverage added to your policy can cost more, you’ll be better protected if you have the right coverage and won’t have to worry about your insurer rescinding the policy. Communicating with your car insurance company about how you’re using your car will ensure that you have the coverage you need, which will give you peace of mind and benefit you in the long run.

Set yourself up for success

Before you sign up with a food delivery or rideshare service, understand what coverage your company offers and where the coverage gap is. This will help you know what to look for as you evaluate rideshare or commercial auto insurance policies.

If you’re happy with your current auto insurance provider, start by asking them what they offer. You can also compare what your current insurer provides with what other insurers are offering to check that your company is competitive.

Purchasing insurance to cover the gap will give you peace of mind and financial protection if you’re in an accident. It will also protect your car, which is essential to your ability to work as a rideshare or food delivery driver.