Question: What is a delivery exclusion on a car insurance policy?
Answer: When a car insurance policy has a delivery exclusion, it basically means that you're not covered if you use your vehicle for the delivery of goods for money.
A delivery exclusion typically states that there is no coverage for bodily injury or property damage arising out of the use of a vehicle while it’s being used to carry persons or property for a fee.
So if you deliver newspapers, pizzas, food of any type, medical supplies, packages or partake in any other type delivery activity that you are compensated for, your personal auto policy won't cover you for accidents or injuries if your car insurance policy has a delivery exclusion. (Read "Why the pizza guy doesn't have car insurance.")
This is a common exclusion with car insurance carriers. Typically, personal auto policies won't cover vehicles used for delivery because of the extra risks that are involved with this type of work.
A car used for delivery is normally driven many more miles than a commuter car that sits in a parking lot all day. Also, due to time constraints, delivery drivers tend to drive at a higher rate of speed and can be more aggressive than your average driver.
These additional risks usually cause car insurance companies to require delivery drivers to get a business-use or commercial auto insurance policy.
There are a few insurers that have a food delivery exclusion endorsement associated with their policies. Since the exclusion is an endorsement, it can be removed from the policy (on a case-by-case basis) for an increased premium amount. This is not typical, as most insurers instead, require delivery drivers to obtain a commercial policy.
If you have a job that requires the use of your vehicle, we recommend that you check with your auto insurance company to make sure that your current policy will cover you.
You may find that your policy will not cover you due to an exclusion or that your insurer requires you to obtain a commercial auto insurance policy to be properly covered.