It seems everything these days is getting more and more convenient. From local restaurants that allow you to order dinner from your smartphone to ridesharing services willing to drive you to the airport in the middle of the night, these companies work hard to make our lives easier.
Even better, these services all offer supplemental income if you choose to work as one of their drivers. Many people choose a so-called side gig with Uber, Lyft, Doordash, Instacart, and others as a way to pay off bills or save up for a rainy day. However, the added risk is that they could be voiding their auto insurance policy.
Are you thinking of working as a driver? Here’s what you need to know about car insurance for food delivery and rideshare services.
Personal Auto Insurance Doesn’t Cover Business Use
In most cases, a personal auto insurance policy doesn’t cover business use. That said, working as a delivery driver while using your vehicle is considered commercial activity. This means that if you get into an accident while on shift, you might not have coverage.
Sound scary? It really is if you consider this means paying hundreds or thousands of dollars for damages if you’re involved in an accident that’s deemed your fault. Yikes! Instead, it is far better to talk to your agent ahead of time to find out what you need to ensure you’re covered.
You Might Have Some Level of Coverage from Your Employer
The good news is that you might have some form of supplemental coverage from your employer. Typically, if you work for a local business or restaurant, this is referred to as owned and non-owned auto insurance. If you’re a driver for a national company, there might be a supplemental policy in place. Either way, this insurance generally only includes liability coverage. That means you would still be responsible for repairs to your own car if you’re involved in an accident while on the clock.
What You Need to Know About Gaps in Coverage
There’s another facet to all of this that you need to pay attention to—potential gaps in coverage. This typically occurs if your employer’s supplemental policy only extends to your vehicle while you’re in the middle of shuttling a passenger or delivering a meal. In some cases, a gap is created where there’s no coverage while you’re waiting for your next assignment or fare. This is why it is so important to discuss your potential circumstances or coverage with a professional insurance agent.
Carpooling vs. Business Use
After understanding everything mentioned above, it is important to determine the distinction between carpooling and business use, as there’s a big difference. In most cases, carpooling involves driving around people you already know and there’s no money exchanged. Business use is usually people you don’t know and you usually charge for your time. However, if your casual carpool turns into something more, you’ll want to get in touch with your agent.
Talk to Your Trusted Agent for Details
Of course, you should always check with your agent before starting a job as food delivery or rideshare driver. This ensures you have proper coverage before your very first shift, meaning you’re never without protection. It is also a great time to review the coverage you do have when you’re off shift and make sure you have an adequate amount.
Luxor Insurance Group is here to help. Our team of dedicated insurance experts can answer your questions regarding business use and personal insurance coverage. Please contact us today for further details or to schedule an appointment.