Guide to food delivery driver insurance

Food delivery drivers have one main job – to get a delivery to its destination quickly and safely. But that doesn’t always happen, so considering food delivery driver insurance is essential.

Grand View Research valued the online food delivery market at $190 billion in 2021, which expected the market to see a compound annual growth rate of almost 11% from 2022 to 2028. 

There are plenty of insurance options to keep delivery drivers safe on the road. Delivery driver insurance will protect drivers if they are involved in an accident while working. Keep reading to see what you need to know about car insurance for delivery drivers.

What is delivery driver insurance?

Delivery driver insurance is a type of car insurance that protects you while working as a food delivery driver.

Most personal auto policies will not cover losses incurred while working. Therefore, delivery drivers need to get this insurance because not having one could result in serious problems for the individual providing food delivery and their employer.

Securing car insurance for delivery drivers is essential in protecting your vehicle and yourself against unforeseen incidents during work hours.

Do you need special car insurance for delivery drivers?

Insurers know that many delivery drivers work for companies like Uber, Lyft, Grubhub and DoorDash.

Your insurer will probably offer coverage for delivering passengers in your car or food to somebody’s house, but only if you pay extra. Incidentally, if your insurer doesn’t call it delivery driver insurance, they may refer to it as rideshare insurance coverage.

Exactly how much you pay depends, naturally, on a lot of factors – are you delivering somewhere in a big city or a rural town? Are you a 17-year-old looking for delivery driver insurance or a 49-year-old? You’ll pay more if you’re younger and working in a bigger city with higher auto theft rates.

You want to alert your insurer that you work for a rideshare or food delivery company. Your rates may or may not go up if this is a side gig, but you don’t know what you don’t know.

Call your insurer, or, if you’re looking for a new policy, ask your agent or contact customer service before you make the switch. You don’t want to drive pizza or groceries as your job and not be adequately covered.

Personal insurance won’t cover business use of your car

If you don’t have delivery driver insurance and haven’t checked to make sure you’re adequately insured, you may find out the hard way that you aren’t covered under your personal auto insurance policy.

In many cases, you need to have a special business use endorsement on your car insurance policy. That’s because using your car to make deliveries is considered a business, not personal.

Business-use coverage also protects drivers who use their cars to deliver packages or other items aside from food.

Car insurance companies charge higher rates for business use because they deem it more high-risk than personal use since delivery drivers are more likely to get into accidents and file claims. But without it, you could be responsible for paying for repairs and medical bills out of pocket if you have an accident.

You would likely have your accident claim denied if you are using your car to make deliveries and getting paid for it unless you notify your insurance company beforehand and get the proper coverage.

But if you’re on your own, here’s how to ensure you are properly insured if you’re a food delivery driver.

What if I’m driving a company vehicle?

If you’re driving a company-owned vehicle, liability for an accident falls on the restaurant. But all the violations still accrue to your own driver’s license. So, jump in and drive – carefully.

Restaurants can purchase auto insurance to protect the business from liability if its delivery driver is involved in an accident while driving a personal vehicle. While covering the business from liability, this type of insurance doesn’t cover the cost of damages to your vehicle or your medical bills.

Do I need rideshare insurance if I drive my vehicle?

Driving your own vehicle requires questions from your insurance company and prospective employers. Most insurance companies won’t cover delivery drivers under a personal insurance policy because of the dramatically increased risks.

Under ordinary circumstances, this would mean contacting your insurer to get business-use coverage. In some cases, the business you work for may offer car insurance when making deliveries, which you can get in addition to your own coverage.

According to Progressive, many personal auto policies will not cover losses while using your vehicle to deliver for a fee. Without this insurance, you could be held personally responsible for an auto accident that occurs while working.

Do delivery services provide insurance coverage for drivers?

Some companies, such as Uber Eats and Amazon Flex, offer coverage during deliveries for their drivers, but this largely depends on the company you’re working for. But if you’re driving for a small, local restaurant, it’s highly unlikely the restaurant’s owners have purchased driver coverage.

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Can you use personal car insurance to deliver food?

Unless your car insurance has a special provision for delivery driver car insurance coverage, you cannot use your personal car insurance.

Personal auto insurance policies do not cover individuals for any business use, including food delivery or pizza delivery. If you’re in an accident while on the job or someone else hits your car when delivering a pizza, it’s up to you and your provider whether they’ll pay or refuse all claims.

Usually, insurers won’t pay out on business claims if they’re coming from a person’s private policy.

If a delivery driver has an accident, whose insurance covers it?

An uninsured or underinsured employer can spell real trouble for a delivery driver.

In one suit from several years ago, attorney Thomas Ryan, Esq., of Cleveland, represented a woman rear-ended by a delivery driver reaching for his dropped phone. Her injuries were substantial, and the pizzeria had coverage limits of only $25,000. This amount didn’t cover the cost of her injuries. She eventually settled with the pizzeria.

A settlement with the business doesn’t necessarily leave the driver in the clear.

“Victims are entitled to recovery from anyone who is negligent,” says attorney Bradford H. Bernstein of New York. “In most instances, it is preferable to put the claim in through the employer, but if they are not insured, a claim would be put in against the driver.”

The driver’s policy is then tested, which may fail if the driver has gone for the cheapest state-minimum liability policy. Even a modest fender-bender can result in insurance claims that easily exceed limits as low as $15,000 per injured person and $5,000 in property damage.

How do you find the right auto insurance to deliver food?

How can you protect yourself? First, ask your employer and personal insurance company about their coverages and exclusions.

“If you plan on using a personal or family vehicle to deliver pizza, then make sure to check your insurance policy for exclusions,” Ryan says. “I would also check the employment agreement with the pizza company. There should be a specific provision in the employment agreement regarding whose vehicle will be used and/or who will be liable in the event of an accident.”

Tip

The only sure way to be covered for damages to your car and liability insurance is to purchase a commercial driver policy. These policies are more expensive than personal policies, but they will provide the protection you need.

In reality, you need more liability insurance protection than the state-minimum requirements provide. Ideally, purchase 100/300/100 coverage limits – $100,000 for bodily injuries per person, up to $300,000 per accident, and property damage coverage of $100,000.

What are the types of delivery driver insurance?

Insurance providers wouldn’t let people use their personal car insurance policies for work-related driving because it might cost them more money if there was an accident or damage incurred while working. But if you want to protect your vehicle and yourself, it would be wise to invest in business coverage.

Here are some of the delivery driver car insurance options to opt for:

Business-use auto insurance

A business-use auto insurance policy is designed for people who use their car for specific and limited business use. If you are involved in a collision that is your fault, the insurance company will take care of all things. Your provider will be there to ensure that your claim is processed as smoothly and quickly as possible. They will help handle any damages or provide rental cars if it’s available on your policy.

Commercial policy

A commercial policy may cost slightly more than a personal auto insurance policy. The price will also depend on your situation and the type of car you own. But with commercial policy, you can rest easy knowing any incident will be covered.

Personal auto insurance

Before you use your personal vehicle for food delivery, make sure you have proper coverage. If you’re at fault in an accident without having the right amount of coverage, then you will have to pay for the damages out of pocket.

Employer insurance

If you have insurance through your ridesharing company, they will cover you in case of an accident within the policy limits. But if there is any damage that exceeds what their policy covers, then you will have to pay for those expenses yourself.

How much does delivery driver insurance cost?

Delivery insurance can be a costly add-on to your average car insurance. It will depend on what kind of delivery you do, the provider and the type of coverage (business use endorsement or rideshare/delivery policy).

Adding rideshare coverage will increase your insurance rates by 15% to 20%. You could also get commercial auto coverage in addition to personal coverage.

What about pizza delivery driver car insurance?

Some policies will cover delivery travel if the job is part-time and the policy is coded to include business use. For instance, Progressive offers pizza delivery insurance — commercial vehicle insurance designed to protect you and your vehicle while working as a pizza or food delivery driver. Having some sort of food delivery insurance may be required by your employer.

Expert tips for teen delivery driver car insurance

Parents should be cautious about allowing a child to use a family vehicle for food delivery insurance. Even with a commercial policy, the car owner can be looked to for compensation once damages exceed the policy limits. A parent may want to place the car in the child’s name on a separate policy.

However, parents should check state liability laws to see if they could still be held responsible for the actions of a child. If the child is living at home and is listed on the parent’s tax returns as a dependent, it’s possible the parents could be held liable even if the car is in the child’s name.

If an accident occurs and liability limits are hit, the driver’s personal assets – or perhaps those of his parents if the driver is a teenager – are vulnerable.

What to do if you’re in an accident while delivering food?

If you meet with an accident while delivering food and don’t have delivery driver insurance, your company could reject your claim. A personal insurance policy is a contract with many different aspects to ensure safety for both parties.

But if you have a car and use it for business without telling the company, they can refuse to cover you should anything go wrong.

Your company’s insurance policy may also cover you in the event of a collision, but it will likely only take care of liability claims. You’ll need to make sure you have collision coverage to pay for damage repair.

This underscores just how important delivery driver insurance is, rideshare insurance, pizza delivery insurance, or whatever your insurer calls it. You get into this business to make money, not to find yourself in financial ruin.

Sources

CNN. “Pizza has a delivery problem.” Accessed February 2023.

Progressive website. “Pizza Delivery Insurance.” Accessed February 2023.

Grand View Research. “Online Food Delivery Market Size, Share & Trends Analysis Report By Type (Platform To Consumer Delivery, Restaurant To Consumer Delivery), By Region, And Segment Forecasts, 2022 – 2028.” Accessed February 2023.

Geoff Williams

Contributing Researcher

Geoff Williams is a freelance journalist and author in Loveland, Ohio. He has been writing about insurance and personal finance since the mid-2000s. His work has appeared in numerous publications, including Life magazine, Ladies’ Home Journal, The Washington Post, CNNMoney, Entrepreneur, Forbes.com and U.S. News & World Report.