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Do delivery drivers need special insurance?

Tips for working on the road

June 23, 2020
Written byKim KlenkHead of Growth
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Delivery driving is the most popular side hustle of the American gig economy, according to a

recent AppJobs analysis. Unlike other popular jobs that made the list, such as freelancing and pet

sitting, it's possible to secure a delivery driving job without a college degree, prior work

experience, or any special skills. While you can earn extra cash without an extensive resume by

transporting people, restaurant meals, or other goods, using your personal vehicle for courier

work isn't without risk.

An auto accident en route to your delivery address can shake up more than the contents of your

car. Before you cruise across town with your first delivery, ask yourself three crucial questions to

make sure your new money-making opportunity doesn't wind up costing you big.

1) What Does My Personal Auto Insurance Policy Cover?

Most standard personal auto insurance policies cover accidents that occur while using the vehicle

for non-business purposes only. So, if you make no changes to your current policy and use your

car to deliver pizzas, packages, or people, you may be headed for trouble. If you try to file a

personal car insurance claim for a delivery related accident, it will probably be denied. This

might also put your ability to keep coverage with your carrier at risk. Contact your insurance

provider to discuss your current policy coverage, including the availability of a business use

endorsement that supports your new venture.

2) How Might a Commercial Auto Policy Protect Me?

Let's face it. The very nature of delivery driving means you'll spend more time on the road than

someone who works a 9-5 office job. From an insurance company's perspective, an increase in

road time is related to higher accident risk. To reduce the risk of providing a commercial

insurance policy, insurance companies often charge higher annual premiums when compared to a

personal auto insurance policy.

But the added expense can give you the confidence of knowing you've done your best to protect

your bank account. A commercial policy will typically cover delivery driving accident related

expenses, such as:

  • Damages to your vehicle or someone else's
  • Damages to someone else's property
  • Driver and passenger injuries

Commercial car insurance policy details differ, so shop around for adequate coverage and

competitive rates.

3) Does the Gig Employer Provide Additional Insurance Coverage?

You may not be entirely on your own. Some employers offer auto insurance coverage for drivers

who use their personal vehicles for deliveries. "Hired", "non-owned vehicle liability insurance",

or "contingent liability coverage" policies can save you the hassle of adding commercial

coverage to supplement your personal insurance. Employer-provided policies may have

restrictions, such as requiring your mobile phone to be in driver mode at the time of the accident.

Keep in mind that these policies are pricey and may not be offered by all employers. Even if

provided, coverage amounts, limitations, and claim requirements differ by employer. Read the

policy details and ask questions about anything you do not understand. You might still be

responsible for coverage gaps requiring payment for the difference out-of-pocket.

Whether you decide to deliver food, dry cleaning, or something else, make sure you're

adequately covered. Don't rely solely on your personal auto insurance policy. Secure separate

commercial coverage to prevent a road mishap from sideswiping the extra money you're earning

from your new side gig.

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