If you’re like most of us, you probably enjoy all the new convenient services that have hit the market over the last few years. Need a ride to the airport? Contact Uber or Lyft. No time for grocery shopping? There are Instacart and Shipt. Want a tasty lunch, but you have to work? Doordash, Grubhub, or your favorite local restaurant quickly deliver.
These great services are also a wonderful way to make a little extra cash. Plenty of people opt to take on a so-called side gig in food delivery or as a rideshare driver. However, most don’t realize that using their vehicle could be compromising their auto insurance coverage. Thankfully, our Main Street Insurance team has you covered with this guide to car insurance for food delivery and rideshare services.
Your Auto Insurance Doesn’t Cover Delivery Work
As a basic rule, your car insurance coverage doesn’t include any commercial use. This includes side job opportunities like rideshare services or delivering food from a local restaurant. The reason is that there is an extended risk when using your car for this type of work that exceeds just driving around town for personal reasons. This means if you get into an accident while on the clock, you could have to pay for all damages out of your pocket, including the other person’s vehicle, your vehicle, medical bills, and other personal property.
Your Employer and Possible Coverage Considerations
However, there is some good news. In most cases, your employer likely has some supplemental coverage to help out. For local restaurants, this can be a type of policy called hired and non-owned auto insurance. And major companies like Uber and Lyft generally have their version of a supplemental policy. The downside to this is that these policies are typically liability only. That means if you’re involved in a crash, they’ll pay for the other person’s car and medical bills. You’ll be on the hook for your vehicle repairs. Yikes!
Be Aware of Potential Gaps in Coverage
Another thing to understand is that there are potential gaps in coverage. While your employer’s insurance helps out a little, there are circumstances where their policy might not even cover you. For example, many supplemental insurance policies only cover you while you’re actively delivering or have a passenger. If you’re waiting for a new fare or assignment, you might not be covered. That’s why it is important to discuss these types of issues with an insurance professional.
What You Need to Know About Carpooling
One common question clients ask us is whether carpooling constitutes as business use of a vehicle. The answer is that generally carpooling is fine as long as you know the people you are transporting and no money is exchanged. Generally, sharing a ride with your coworker or bringing your child’s friends to soccer practice is fine. If you start to charge for this service or do it regularly, it is a good idea to talk to your agent about potential effects on your insurance policy.
Always Get in Touch with Your Agent
What all of this comes down to is a need to talk to your local agent. Having adequate car insurance is important and working as a delivery driver affects your coverage. Discussing the issue with an insurance professional is the only way to determine whether you are appropriately covered.
Ready to learn more about potential pitfalls? Please get in contact with our Main Street Insurance team today to discuss your personal auto insurance coverage and how it is affected by working a side gig.
