Food delivery drivers and delivery professionals are experts in their field. They know what it takes to make sure the items they deliver reach its destination without any damage or delay. But how do they protect themselves when driving for work?

It's not always easy, but there are insurance options that can help them be safe on the road. Delivery driver insurance will protect the drivers if they are involved in an accident while working.

This guide will help explain some of the insurance options available for delivery drivers.

Key Highlights
  • Most insurance companies will not cover delivery drivers under a personal policy because of the dramatically increased risks.
  • If you're using your own car to deliver food, you should consider buying delivery driver insurance as additional protection because your personal policy may not cover you.
  • Restaurants can buy auto insurance to protect themselves if the delivery driver gets in a car accident while driving a personal vehicle.
  • You can be covered for both damages to your vehicle and liability insurance if you have a commercial driver policy.

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, it's important for delivery drivers to get this insurance because not having one could result in serious problems to the individual providing service as well as their employer.

Delivery driver insurance is an essential step in protecting both your vehicle and yourself against unforeseen incidents during work hours.

How COVID-19 affected delivery driver insurance needs?

With many of the nation’s restaurants now restricted to takeout and delivery services, it’s no surprise eateries are hiring delivery drivers to meet demand.

For example, Domino’s franchise owners in the Los Angeles area were expected to hire an additional 2,500 drivers over the past few months to deliver food during the COVID-19 pandemic, according to the Los Angeles Times.

If you're using your own car to deliver food, you're probably not covered under your personal auto insurance policy. In some 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 use, not personal use.

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

Car insurance companies charge higher rates for business use because they deem it to be more high-risk than personal use, because 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 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, and get the proper coverage in place.

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 for when you're making deliveries, which you can get into addition to your own coverage.

However, amid the social distancing due to COVID-19, some insurance companies and states are stepping in with relief measures for delivery drivers.

For example, Wisconsin Gov. Tony Evers and the state insurance commissioner issued an order requiring insurance companies to cover delivery services on drivers’ personal car insurance policies and restaurants’ liability policies at no extra cost to the policyholder. The mandate is retroactive to March 17, when the state ordered restaurants to close their dining areas.

Several other states have encouraged insurance companies to ease restrictions on coverage for food delivery, below are links to details:

To see if your state insurance commission or legislators have outlined guidelines for delivery driver coverage during COVID-19, check the National Association of Insurance Commissioners website for announcements.

How major insurance companies are responding to delivery driver coverage amid COVID-19:

AAA: Auto insurance coverage will be extended up through May 4, for any driver who winds up using their personal vehicle to deliver food or medicine. Check to see if they extend this, as their last statement said, "This change is currently scheduled to be in effect through May 4, and we’ll continue to evaluate as the situation progresses."

Allstate: Allstate will automatically cover customers who are using their personal vehicles to deliver food (also medicine and other goods) for a business during the Covid-19 emergency period. As long as a Covid-19 emergency order is in place in your state, you're automatically covered.

Farmers Insurance: Farmers Insurance put out a notice stating: "We're automatically extending coverage, for no additional charge, to customers with Farmers Auto and Motorcycle policies who have started making food, grocery, pharmacy and medical supply deliveries using their personal vehicles through May 31, 2020."

Liberty Mutual: The insurer has expanded coverage for customers who use their personal vehicles to deliver food and medicine. The coverage also applies to Safeco customers, which is part of Liberty Mutual Group. The coverage is effective from March 16 to May 22, 2020, and claims must be reported by July 1, 2020.

MetLife: Many of MetLife Auto & Home auto insurance policies already provide coverage for people using their personal vehicles for delivering medicine or food. But if yours doesn't? MetLife, in its newsroom, mentioned that it will extend coverage from March 20 through May 1, 2020.

Nationwide: The insurer spells out the situation on its blog in this way: "Nationwide will provide coverage for most existing restaurant and retailer exposures who now engage in delivery service due to COVID-19 restrictions. And, given the challenges created by COVID-19, you may request mid-term adjustments related to reducing exposures for your customers."

Progressive: Its website doesn't offer many details, but it does say that they are "expanding coverage for personal auto customers who are temporarily delivering food or medicine."

Safeco: Safeco is part of Liberty Mutual. Its website details how Safeco is managing things: "We have proactively expanded all our personal auto policies to cover customers who use their personal vehicles to deliver food, medicine, medical supplies, or medical equipment for a commercial purpose.

This accommodation does not apply to drivers completing deliveries for a transportation network company or online only delivery platform. This additional protection is already in effect for all personal auto policies in all states for losses occurring from March 16 to May 22, 2020, and reported by July 1, 2020. Additional limitations apply, please contact us for more details."

Travelers: The website doesn't mention it, but Travelers has put out a press release stating that is offering coverage to customers who use their personal auto to make food, grocery, pharmacy and medical supply deliveries.

USAA: At the time of this writing, there was nothing on USAA's website, but through a press release, the insurer has assured its members that they have "Expanded auto insurance coverage for members who use their personal vehicles to deliver food, medicine and other goods for commercial purposes."

There is an exception, USAA says - the coverage "does not apply to delivery through a Transportation Network Company app-based delivery service."

Westfield: Westfield is extending coverage to personal auto customers who are engaged in delivering essential goods, such as food delivery.

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

Do you need special car insurance for delivery drivers?

If you’re considering taking a job as a food delivery person, there are a few things you should know before accepting the position.

Driving a company vehicle

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

Driving your vehicle

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

“Many personal auto policies will not cover losses that occur while using your vehicle to deliver for a fee. That means that without this insurance, you could be held personally responsible for an auto accident that occurs while working,” according to Progressive’s website.

However, 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,” which its website says is commercial vehicle insurance designed to protect you and your vehicle while working as a pizza or food delivery driver. Having food delivery insurance may be required by your employer.

Restaurant policies still don’t cover your car’s damage

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.

Can you use a personal car insurance coverage to deliver food?

Unless your car insurance covers you for delivering food, you will not be able to use your personal car insurance.

Personal auto insurance policies do not cover individuals for any business use, including food delivery or pizza delivery. This means that 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.

Who pays? Whoever has the money

Attorneys prefer to sue the employer, of course, rather than the paid-by-the-hour employees.

But some are completely uninsured, or drastically underinsured. Some don't know they need a policy, and others are trying to avoid the cost.

Whatever the reason, an uninsured or underinsured employer can spell real trouble for a delivery driver.

In one suit from several years ago, attorney Thomas Ryan of Cleveland represented a 43-year-old woman who was 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 put to the test, which it 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.

Once those limits are hit, the driver's personal assets--or perhaps those of his parents if the driver is a teenager--are vulnerable.

Insurance with all the toppings: car insurance for food delivery

How can you protect yourself?

"If you plan on using a personal or family vehicle to deliver pizza," Ryan advises, "then make sure to check your insurance policy for exclusions, 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 iconTip

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

In reality, you need more liability insurance protection than the state-minimum requirements provide. Senior Consumer Analyst Penny Gusner recommends levels of 100/300/100--that's $100,000 for bodily injuries per person, up to $300,000 per accident, and property damage coverage of $100,000.

Types of food delivery insurance

Insurance providers won'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 of you to invest in business coverage.

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

Business Auto Insurance

Business 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

Commercial policies may cost a little more than personal auto insurance policies. 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.

Expert tips for teen delivery driver car insurance

"Parents will want to be cautious about allowing a child to use a family vehicle for pizza delivery," Gusner says. Even with a commercial policy in place, the car owner can be looked to for compensation once damages exceed the policy limits.

Tip iconExpert's Tip

Penny Gusner says 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 parents' tax returns as a dependent, it's possible the parents could be held liable even if the car is in the child's name.

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 the appropriate coverages, 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 you 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.

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