You lead a busy life. Thankfully, there are tons of convenience apps out there to help make things a little easier. Whether you are ordering dinner from your favorite local restaurant or setting up a ride to the airport, these services are a great way to save time.
Not surprisingly, these services also make a great option for those looking to make a little extra money or pay down debt. Many people have found services like Lyft, Uber, Shipt, Doordash, and others are all a great way to supplement a primary income.
However, the job comes with added risk for those using their vehicle while on the job. If you’re planning on starting one of these side gigs, here’s what you need to know about car insurance for food delivery and rideshare services.
You Probably Don’t Have Coverage Under Your Personal Auto Policy
In most instances, business use is excluded from a personal auto insurance policy. What this means is that when working as a delivery driver, you potentially run the risk of not having coverage if you’re driving your vehicle.
In short, this equates to potentially having to pay for accident damage out of your own bank account or face a huge lawsuit. If you figure this includes the cost of repairs to your vehicle plus the other person’s car and any medical bills, the bill could easily add up to the thousands.
There’s a Good Chance Your Employer Offers Supplemental Coverage
Not all hope is lost. In most cases, there’s a good chance your employer offers some sort of supplemental coverage. For restaurants and local businesses, this is usually called an owned and non-owned auto insurance policy. Most major app-based delivery services provide a supplemental policy. This is typically a small amount of liability coverage in case you’re involved in an accident while on shift. It does not, however, cover repair costs for your vehicle. This means that if you’re in an accident while working, you’ll likely have to pay the body shop out of your pocket.
You Might Experience a Gap in Coverage
It’s also important to look out for potential gaps in coverage. This typically happens when your supplemental policy from your employer doesn’t cover you during your entire shift. For example, it might only extend coverage while you have an active passenger or are in the middle of a delivery—not when you’re waiting for your next assignment. If you get into an accident during this time, you would again have to pay for it out-of-pocket. Thus, it is very important to speak with your local agent to determine if you’re at risk for this type of gap in coverage.
How Does Carpooling Affect Your Insurance?
In most cases, carpooling does not affect your insurance as it is not considered business use. Why? Usually, you know the people you are transporting. This can include coworkers, friends, neighbors, or even your child’s baseball team. Typically, there is no money exchanged for the ride. However, if you start to charge for your services or you’re doing it regularly, it is a good idea to give your local agent a call.
Speak with Your Trusted Local Agent
So, do you need to talk to your agent before starting as a delivery driver? Of course! You’ll want to bring in a copy of your employer’s supplemental policy to help uncover those potential gaps, but it is always a good idea to review such a big change in vehicle risk and use with a professional.
Andreotti Insurance is your trusted local car insurance agency. Our team is happy to answer any questions you have. Please contact us today to schedule an appointment.