There’s no doubt that services like Instacart, Uber, Lyft, and others have made our lives easier. At no other time in history could you pick up your phone, tap the screen a few times, and instantly have someone at your door willing to bring you dinner or drive you across town.
But these services aren’t always about convenience. They can also be a great opportunity for those looking to make extra money and supplement their income with a so-called side gig. However, there are a few important considerations you need to make before taking on one of these jobs—namely, whether your auto insurance is sufficient on its own. Here’s what you need to know about car insurance for food delivery and rideshare services.
Your Personal Auto Insurance Doesn’t Cover You
It’s important to understand that as a general rule, there is no coverage when utilizing your personal vehicle for food delivery and rideshare services. That means if you get into an accident while working for one of these types of services, you might have to pay for damage or injuries out of your own pocket.
Why? There are certain insurance rules when it comes to using personal vehicles during business activities. Technically, using your personal vehicle for one of these services is considered commercial use and therefore nullifies your policy contract. This is why it is so important to make sure you are covered in other ways.
Coverage Considerations Through Your Employer
While the thought of driving without insurance sounds scary, it is important to realize that you likely have some supplemental coverage from your employer. Most small restaurants and pizza parlors that employ delivery drivers have a special type of policy called hired and non-owned insurance. Essentially, this covers you for liability and property damage if you’re involved in an accident while on the clock. National ridesharing apps like Uber and Lyft also generally offer a bit of supplemental coverage, but again this is usually only third-party and doesn’t cover damage to your vehicle.
Watch Out for Gaps in Coverage
That said, you’ll want to watch out for any potential gaps in coverage. Supplemental and hired and non-owned usually have limitations. This includes only being in force while you’re actively dispatched—not while you’re waiting for a new delivery assignment or passenger. At the same time, personal coverage isn’t in force because you are still in the process of using the vehicle for business. This can be a time when you find yourself in a gap of coverage, which needs to be addressed.
What About Carpooling?
Keeping all of the above in mind, many of our clients wonder if carpooling is still covered. The answer is that carpooling is generally fine as long as you are transporting people you know—either through work or the kid’s sports teams or some other basic association at a minimum. Some restrictions still apply, so it is best to confirm before you begin doing this on a regular basis.
Bottom Line? Talk to Your Agent First
Of course, the bottom line is that you need to talk to your insurance agent before taking a job as a delivery or rideshare driver. You should always have personal insurance coverage for your vehicle, but there might need to be adjustments to your policy to help ensure you are covered completely.
At Mooney Insurance, we understand the unique intricacies of making sure you have the right amount of coverage for your personal vehicle while driving for Uber, Lyft, Grubhub, Doordash, and others. Please contact us today to learn more about your car insurance options.
