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Personal car insurance will not cover a vehicle used for food delivery, so a commercial policy is needed to cover all business purposes. There are a few details to keep in mind when purchasing commercial auto insurance, so we’ll discuss the potential issues below.
Our team has reviewed insurance industry leaders to help food delivery drivers find the best car insurance deals on the market. The simplest way to find affordable commercial coverage is by comparing quotes from various insurers before picking a plan.
Do Food Delivery Drivers Need Special Insurance?
If you’re thinking about working for Uber Eats or Grubhub, you might be wondering if personal car insurance covers a vehicle used for food delivery. The answer is that personal auto insurance policies typically exclude coverage for vehicles when used for business purposes.
While your vehicle will be covered by personal car insurance when not used for food delivery, this coverage goes away while you’re working. You’ll need a commercial auto insurance policy when you’re driving for DoorDash, Domino’s Pizza or another food delivery service.
What is Commercial Auto Insurance?
Commercial car insurance is a type of coverage designed to protect individuals and businesses that use vehicles for their operations. Vehicles covered include everything from delivery vans and passenger cars to dump trucks and trailers. Commercial auto insurance typically comes with higher limits than most personal coverage plans, and it has some additional features.
It became common during the COVID-19 pandemic for people to take on side hustles working for companies such as Postmates, Instacart and Uber. Many drivers, however, didn’t realize that the right coverage for their new job included rideshare insurance or commercial auto insurance if they were using their own cars.
While the cost of commercial car insurance varies depending on the specific needs of a business, it’s almost always pricier than personal auto insurance. However, it provides peace of mind for businesses and is necessary according to most state laws. It’s somewhat more difficult to find cheap car insurance when you need commercial coverage, but far from impossible.
What Can Be Covered by Commercial Auto Insurance?
Personal car insurance will not cover a vehicle used for food delivery, but commercial coverage will. Below are some common types of food delivery insurance protection:
- Liability coverage: Almost every vehicle must meet the state’s bodily injury and property damage liability insurance standards. These amounts vary by location, but they cover damages to other cars or people in the event of an accident that you caused.
- Medical payments coverage (MedPay) or personal injury protection (PIP): Personal medical benefits are extended to those who pick up MedPay or PIP coverage. Some states require PIP, but it’s an add-on insurance coverage in most locations.
- Uninsured/underinsured motorist coverage: Required in many states, underinsured and uninsured motorist coverage keep you and your vehicle safe against those who drive without carrying enough insurance. Otherwise, you could end up paying for damages caused by drivers who illegally drove without coverage.
- Collision insurance: This coverage choice takes care of damages to your own vehicle after you cause a car accident. Remember that liability insurance only takes care of issues caused to other impacted drivers.
- Comprehensive insurance: Drivers get protection for their vehicles against theft, vandalism and poor weather conditions when they choose this optional type of coverage.
Note that full coverage auto insurance isn’t required by any states, though your food delivery company could potentially make it mandatory.
How Much is Commercial Auto Insurance?
The cost of commercial insurance varies depending on the business type, cars used, chosen coverage level and deductible amount. Plans aren’t extremely expensive for most vehicles used for food delivery, but expect a higher insurance cost than for a personal car insurance policy.
Personal car insurance will not cover a vehicle used for food delivery purposes because drivers are more likely to get into accidents while on the job. Between navigating unknown streets and trying to quickly get from house to house, there are plenty of potential dangers associated with food delivery.
How To Get Commercial Auto Insurance
If you need to purchase commercial car insurance for food delivery, it’s smart to get multiple auto insurance quotes from different providers. That way, you’ll be able to tell which companies are willing to insure your vehicle for the best rates possible.
Most car insurance providers offer commercial as well as personal auto insurance policies. Remember that you’ll need both coverage types, since they offer protection for your car during different situations.
Consider Opting for Business-Use Coverage
Certain motorists may be able to pick up the more affordable business-use coverage rather than a commercial type of insurance. This option is only available to those who deliver food extremely rarely, so it won’t work for most full-time or even part-time delivery drivers.
Remember that business-use coverage is meant for those who almost never need their vehicles for commercial purposes. It’s intended for one-off instances rather than for repeated use as is common with Lyft, Amazon Flex and pizza delivery companies. Most who deliver goods or transport passengers will need either commercial auto insurance or rideshare coverage.
It’s also worth keeping in mind that business-use coverage is different from business insurance. You won’t be able to pick up a business-use insurance policy to insure your company’s overall needs if you’re a business owner.
Our Recommendations for Auto Insurance
Personal car insurance will not cover a vehicle used for food delivery, so you’ll need another policy to protect your car while on the job. We’d recommend GEICO, Progressive and State Farm as some of the top coverage options for delivery driver insurance.
GEICO: Most Discount Options
GEICO is one of the most popular car insurance companies in the US and has a wide range of coverage and discount options. In addition, GEICO has a well-rated mobile app that makes it simple for drivers to file a claim or make a payment.
Progressive: Best for Accident-Prone Drivers
Progressive is a standout insurer for those with bad driving records, speeding tickets and recent DUI violations. The company is relatively generous with applications, so few drivers will face issues getting quality coverage from Progressive. If you’re interested in this auto insurer, make sure to read our full Progressive insurance review.
State Farm: Best Customer Experience
State Farm ranks well for students, with competitive premiums and various discounts for those attending high school or college. State Farm’s insurance agents usually get strong customer service scores and the provider has an easy-to-use mobile app.
Frequently Asked Questions (FAQs)
Can I become a delivery driver without commercial insurance?
No, you can’t become a delivery driver without commercial insurance. If you get into an accident while using your car for business purposes, your own insurance policy won’t cover the damages. For all intents and purposes, you’re driving uninsured.
What’s the difference between commercial and personal auto insurance?
Commercial auto insurance covers vehicles when they’re being used for business purposes, while personal auto insurance offers coverage for personal uses. Commercial vehicle insurance typically has higher policy limits but costs more than personal auto insurance coverage.
Do you need special insurance to deliver food?
Yes, you need special commercial auto insurance to deliver food for companies like Uber Eats, DoorDash and Grubhub. That’s because personal car insurance will not cover a vehicle used for food delivery. Your own policy works when you’re not working, but you’ll need special coverage while on the job.
