Whether delivering food is your primary job or just one of your ways to make extra cash, it’s important that you have the right auto insurance plan. Failing to do so can leave you responsible for thousands in vehicle repairs if you are involved in an accident.
You’re probably thinking something like “I already have car insurance.” While that may be true, your personal insurance policy is not the same as food delivery car insurance. In this guide, we address everything you need to know about food delivery car insurance so you can determine if you need to upgrade your plan.
We have reviewed every major insurance provider to identify the best car insurance in the industry. If you want to jump right into comparing rates, simply enter your zip code into the free tool above.
Do Delivery Drivers Need Special Car Insurance?
Virtually every car insurance company will ask you at the time of your enrollment whether your vehicle is being used for “personal” or “business” purposes. If you were not performing food deliveries when you signed up, you likely answered no to the business part of this question. This means that your insurance company will not cover any claims that occur while conducting business with your vehicle.
With that said, you should consider special car insurance if you are performing on-demand deliveries. The good news is that the company you are delivering for may provide some form of coverage already.
Types of Food Delivery Car Insurance
As a food delivery driver, you are not using your car for business purposes 24/7. However, most providers will not let you use your personal auto policy when driving commercially. If you want to protect yourself and your vehicle, you can get a business coverage policy.
If you make the switch to commercial auto coverage, the policy will replace your current form of coverage. If you ever stop making deliveries, you can always switch back to a personal auto insurance policy.
Another option is to get rideshare insurance. This is a special type of insurance that is offered by some of the major providers, like GEICO. It is designed specifically for ridesharing drivers and those who make on-demand deliveries. It is usually cheaper than business auto insurance, and it will still cover you in the event of a delivery-related accident.
Rideshare insurance does not limit you to just one company, either. This means that if you drive for both Grubhub and DoorDash, for instance, rideshare insurance is a great option.
Where to Get Food Delivery Car Insurance
Many major car insurance providers like GEICO, Progressive and State Farm offer rideshare insurance. Some companies like Progressive allow you to add rideshare insurance to your existing auto policy. You can do this through the app or by contacting an agent directly.
Allstate has joined in and added rideshare insurance to its list of coverages. The company calls this offering Ride for Hire, but it functions much like the Progressive policy. If you are engaged in ridesharing or food delivery, simply add Ride for Hire to your existing account.
State Farm claims that adding rideshare coverage typically costs about 15% to 20% of your existing auto insurance premium. However, it will fluctuate depending on the coverages you have chosen.
Do Restaurants Provide Food Delivery Car Insurance?
So far, we have primarily focused on delivery services like Grubhub and DoorDash. But what about restaurants? If you deliver food for a specific restaurant, you are not eligible for ridesharing coverage and will need business auto insurance.
Most restaurants do not pay for coverage if you are using your own vehicle for deliveries. However, it is worth asking your employer to find out if they provide commercial insurance at a discounted rate. On the other hand, if you use a company vehicle for deliveries, they must carry the insurance policy.
Do Delivery Apps Cover Auto Accident Damages for Drivers?
You may be surprised to learn that some delivery apps actually provide auto coverage for drivers. This is because most states require them to do so. However, they only provide coverage while your app is active and you are carrying out tasks for the company. We have covered the insurance policies of some leading delivery services below:
- Uber Eats: Uber Eats has one of the best policies. The company provides up to $1 million in liability coverage from the moment you approve a delivery until you drop off the food. Uber Eats also provides collision and comprehensive coverage, but these policies include a $1,000 deductible.
- DoorDash: DoorDash also has a $1 million policy that covers bodily injury and property damage. However, it only applies to “active deliveries.” This means that you have to be in possession of the food in order to receive coverage.
- Grubhub: Grubhub does not provide any commercial auto coverage. For this reason, many drivers consider adding rideshare insurance to their policies before beginning deliveries.
- Postmates: Postmates provides $1 million liability coverage per accident. This coverage is intended to cover property damage and injuries to others. It is specifically designed to be used after your personal policy limits have been exhausted.
- Instacart: Instacart does not provide any coverage for its drivers.
What to Do If You’re in an Accident While Delivering Food
Hopefully, you will not be involved in a traffic accident while out delivering food. However, it is important that you know what to expect if you are. The chain of events that follows any accident will largely depend on what type of coverage you have. Here are some example scenarios:
Personal Auto Insurance
If you are at fault and were conducting business without proper coverage, you will likely have to pay for all the damages out of pocket. If the other party was at fault, you may be able to file a claim against their policy.
Business Auto Insurance
If you are involved in an at-fault crash and have business auto insurance, your provider will handle everything. Your provider will walk you through the claims process, pay for damages and even provide a rental car (if your policy includes it).
Employer Insurance
If you are employed by your ridesharing company, then you will have to contact the company directly. If the incident falls within your company’s limitations, then you will need to pay the deductible to reap the benefits of coverage. If the company determines that your incident is not covered by its policy, then you may be stuck paying for damages out of pocket.
Who Pays for Damages?
Who pays for damages in a crash will depend on how you are insured. It will also depend on whether or not you were deemed to be at fault for the crash.
Can You Purchase Commercial Auto Insurance If You’re a Self-Employed Delivery Driver?
Yes, you can purchase commercial auto insurance if you are self-employed as a delivery driver. Rideshare insurance is also a smart option if your policyholder offers it. Compare rates and decide which provides the best combination of value and coverage.
Our Recommendations for Auto Insurance
While there are many insurance companies out there, not all of them are created equal. To help you narrow your search, we have analyzed and rated all of the major insurance providers. Based on our industry-wide review, two of the best options available today are GEICO and Progressive. Read on to see how they stack up, or use the free quote tool below to find the right coverage option for you.
Progressive: Best for High-Risk Drivers
We found that Progressive is the best option for high-risk drivers. The company earned an 9.1 out of 10.0 overall in our review. Progressive has a strong industry reputation with high ratings from experts like AM Best and the Better Business Bureau (BBB). Its coverage options include standard car insurance, as well as custom parts and equipment coverage, roadside assistance, rental car reimbursement and rideshare insurance.
GEICO: Best Overall
We ranked GEICO as the best overall insurance company. The insurer consistently outscored the competition in our industry-wide review. GEICO is a smart choice for comprehensive coverage, competitive auto insurance rates and responsive customer service. In addition to standard coverage, you can get mechanical breakdown insurance, roadside assistance, rental car reimbursement and rideshare insurance.
FAQ: Food Delivery Car Insurance
Why is business auto insurance coverage more expensive?
Auto insurance companies conduct risk assessments to set coverage rates. Business insurance is more expensive because you will be driving more than the average vehicle owner. All those extra miles increase your likelihood of filing a claim.
What insurance companies cover food delivery?
Most of the major companies offer food delivery car insurance, also called rideshare insurance. If you already have a personal policy with a reputable provider, ask about adding rideshare insurance or switching over to a business insurance policy.
Do you need car insurance for DoorDash?
Your car insurance company may require that you purchase coverage before driving for a rideshare service like DoorDash. Regardless of whether or not it is required by your insurer, your regular auto insurance policy generally will not cover you while you are working for a service like DoorDash so it can be worth purchasing rideshare car insurance.
What car insurance do I need for food delivery?
You can purchase rideshare insurance or business insurance for food delivery. This can be added to your existing policy, or it can be a separate plan entirely. You will need to speak with your current provider to accurately assess your options. You can also shop around for providers with strong rideshare insurance coverage.
Methodology
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, pricing, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.
