What’s for dinner tonight? Need a ride to the airport? Thankfully, food delivery and rideshare apps make saving time easier than ever before. Not only do these services offer a premium convenience, but they’re also available at the touch of a smartphone button.
Even better, these services offer the chance to make a little extra side money as a delivery driver. Whether you want to pay off debt or save up for something special, these so-called side gigs are a flexible way to make it happen. But what many people don’t know is that they come with a risk—using your personal vehicle might void your auto insurance coverage.
Learn more about car insurance for food delivery and rideshare service apps.
Did You Know Personal Car Insurance Doesn’t Cover Business Use?
Most people who start these kinds of jobs don’t realize that a personal auto policy doesn’t cover business use. This means that using your vehicle and your insurance to work for a company like Uber, Shipt, Doordash, or your local pizza place means there’s no insurance coverage if you get into an accident.
Furthermore, it also means that getting into an accident while on shift could equate to having to pay thousands of dollars to repair your vehicle, the other driver’s vehicle, and any associated medical bills. This is a scary proposition for most people.
You Might Have Some Coverage from Your Employer
These companies don’t want to hang you out to dry if you use your car. In most cases, you’ll likely have some form of additional coverage from your employer. Local restaurants including pizza parlors, typically have what’s called owned and non-owned auto insurance. Likewise, national rideshare and food delivery apps provide supplemental insurance to contract employees. While these policies offer a small amount of liability coverage, they don’t typically include any damage to your vehicle. Again, this means you would be personally responsible for repairs should you get into an accident.
Beware of Potential Coverage Gaps
Another thing you need to know about is potential coverage gaps. In some cases, these policies supplied by your employer don’t cover the entire time you’re on shift. Certain policies specify that you’re only covered while you’re actively in the middle of an assignment or a delivery, which creates a gap in coverage. This is why it is vital to discuss your coverage situation with your local agent instead of depending on your employer’s help.
What About Carpooling?
Are you wondering if carpooling counts as business use? In most cases, it does not. This is because of two key distinctions. First, the people you transport while carpooling are generally those you know, such as coworkers or your child’s soccer team members. Second, there’s usually no payment exchanged. Thus, your policy coverage remains intact. If you start to charge money or are carpooling often, it is still a good idea to check in with your insurance agent to make sure there are no issues.
Confused? Talk to Your Local Agent
While this whole process can seem a little confusing, your local insurance agent is here to help answer any questions that you have. That’s why it is important to discuss becoming a delivery driver before you start your first shift to ensure there are no issues when you get out on the road. Failure to do so could mean a costly mistake, so don’t delay!
Ready to start the conversation? Our team at Imes Insurance Associates is here to help. Please get in touch with us today to schedule your appointment.