Delivery services like Door Dash and Uber Eats are taking the marketplace by storm by addressing several needs simultaneously: restaurants often do not want to hire and pay delivery drivers; consumers want delivery from diverse restaurants, many of which would not traditionally deliver (like fast food); and many people are looking for “side-hustles” to earn money in a flexible way, on their own time. With the growing popularity of on-demand meals, the need for drivers is growing rapidly. Every service will require that your car is properly insured – but who covers what in the event of an accident?
Utilizing your car for a business of any kind raises questions when that vehicle is involved in an accident, especially if there is injury or harm to another person. How does auto insurance work in these instances?
DoorDash & Uber Eats – Delivery Insurance Policies
Before we get started with what individual hiring companies may offer, it is important to note that traditional auto insurance companies are still adapting to this new segment of business. If you are considering joining one of these delivery services, it is important to check your policy or better yet – call your insurance company to make sure that you understand your coverages, and if your policy will address an accident which occurs while on a delivery.
While it may be tempting to simply chance it, a single accident can be very costly, and you want to be sure that you have adequate coverage so that you are not held personally responsible. It is also important to note that if your personal insurance company is made aware that you are driving for a delivery service without obtaining their required overage, you will likely lose your insurance coverage altogether.
(Please note these terms were correct at the time of writing and may have changed. It is essential to read the current vendor terms of services before signing on to be a driver for any company.)
Door Dash
DoorDash offers a contingent liability policy to their drivers when they are in possession of goods to be delivered. In other words, the coverage is valid when you are physically delivering food, but not if you are enroute to the restaurant to pick up the food. DoorDash insurance coverage is applied only after you’ve exhausted the coverage from your personal auto insurance policy. They will cover damages and injuries drivers cause to other parties while on an active delivery, but there is no collision coverage to help pay for damage to your vehicle.
Clearly, DoorDash drivers do not receive very extensive coverage from the company, so understanding how your personal car insurance works in these situations is critical before you get on the road delivering. Your personal policy may need to be supplemented in order to be fully protected in these scenarios.
As of June 27, 2019, DoorDash added an optional occupational accident policy to their drivers, which includes coverage for medical expenses up to $1,000,000 with no deductible or co-pay; disability payments up to $500 per week, and survivor payments up to $150,000 for eligible dependents.
Uber Eats
When a driver signs up to deliver for UberEats, the contract provides coverage similar to the coverage provided for their popular rideshare program. As of March 1, 2019, Uber provides $1 million of liability coverage per incident, covered by Uber’s commercial insurance policy. Unlike DoorDash, a drivers’ liability to third parties is covered from the moment a driver accepts the request until he delivery is complete – no matter at what stage of the process the accident takes place.
Uber also provides contingent comprehensive and collision insurance. This insurance is contingent upon the driver holidng personal comprehensive and collision insurance; and will apply to physical damage to the vehicle up to the actual cash value of the vehicle. A $1,000 deductible will apply.
Delivery Insurance Final Word
Many people find that food delivery is a lucrative way to use spare time and their personal vehicle to have a side business. If you are looking into signing a contract with any rideshare of food delivery service, check first with your insurance company – then read your contractual terms of delivery service carefully. A little due diligence will go a long way.
Have questions? Call the Sarasota and Bradenton insurance experts at Anderson & Associates Insurance Group.
