Do delivery drivers need special insurance?
Tips for working on the road
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
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.