When was the last time that you ordered food delivery? If it was at least once in the past week, you’re ordering at the same rate as 60 percent of American consumers. And with the demand for convenient third-party food delivery and rideshare services on the rise across Illinois and beyond, many Rolling Meadows residents have considered driving for one of these companies as a good way to make extra cash for the holidays. You’ll be using your vehicle to make deliveries as an independent contractor, so your auto insurance policy should protect you in the event of an accident, right? Wrong. There’s a good chance that your current policy won’t cover this type of situation. Keep reading to learn more.
How Does Car Insurance Work for Delivery Drivers?
When you use your car for work-related purposes like making deliveries or dropping off rideshare customers, you are technically transporting goods. Typically, personal auto insurance policies have exclusions written into them that make your coverage null if you use your vehicle for this purpose or “driving for hire.” Even if you’ve done a great job and invested in comprehensive insurance coverage, if you’re in an accident while working your delivery job, you will likely be unable to file a claim under this policy.
What Type of Insurance Coverage Do I Need?
Several different insurance options may work to help prevent any gaps in coverage and protect you when you’re making deliveries. These include:
Employer Insurance Coverage
Some of the more popular third-party delivery companies understand that your personal auto insurance policy won’t work while you’re making deliveries. To combat this problem, they may provide supplemental insurance coverage to help bridge the gap. However, it’s important to keep in mind that this coverage may only be in effect when the application is on and you are in the middle of completing a delivery job or rideshare drop-off. If you have the application open but are simply waiting for your next job, you may not be covered.
Commercial Auto Insurance
This is a very comprehensive auto insurance option that can help to cover the cost of damages related to your vehicle and any situation where you are found to be responsible for another driver’s medical expenses, and potential legal fees.
Rideshare Insurance Add-On
Designed to fill in those gaps in coverage, rideshare coverage is typically part of a hybrid policy or available as an add-on to your existing auto insurance policy. Although not offered in all markets, if it is available in your area, this add-on should provide limited liability coverage.
For those who only plan on delivering food part-time, a business-use policy can help to make sure you’re never driving without proper insurance protection. However, if you are a full-time food delivery or rideshare driver, you may not qualify for this type of policy.
Hired and Non-Owned Auto Insurance
Hired and non-owned auto insurance provides much-needed liability coverage for those who use their vehicles for work. But while it does provide coverage for bodily injuries and property damage, it does not include collision damage coverage.
Talk to Our Independent Agents Today
While working as a delivery driver can be a great way to make some fast cash, you need to consider your insurance coverage before you start taking orders. If you’re unsure how this change may affect your auto insurance policy, our friendly and knowledgeable agents at AFI Insurance are here to help. Call (847) 397-6918 or contact us online today for more information, and be sure to request a free quote.