Insurance for delivering food can be more expensive than a traditional personal auto policy, but it’s important to have. By law, any vehicle parked or driven on a public roadway will be required to maintain minimum insurance, or else you will be subject to penalties such as tickets or suspensions. For those who make money delivering food, having the right coverage can prevent them from being stuck with a major bill.
Types of Policies for Food Delivery Drivers
There are a few different options to choose from when picking auto insurance to cover your vehicle during your food deliveries.
Commercial Policies
As stated on Carinsurance.com, a commercial policy is an option for food delivery drivers though it is more expensive than a personal policy. With this type of policy, you will be covered even if you are in an accident when on a delivery. The rates will be based on your vehicle, driving record, and demographics.
Business-use Policy
Your vehicle must be protected by a business-use policy if you use your vehicle to:
- Deliver food
- Travel to far-off job sites
- Haul equipment or work tools
- Transport people
- Make sales
Accidents that occur during the course of these activities may not be covered under a personal policy without the business-use designation, as stated by Autoinsurance.org.
Personal Auto Policy
Most personal auto insurance policies will not cover any accident or damage that occurs during business use. However, such coverage would allow you to meet the required state minimums. It’s always advisable to inform your insurance company how you’re using your vehicle to find out what their coverage requirements are. Otherwise, they can deny a claim and not allow you to renew your policy.
Coverages Based on the Service You Drive For
Depending on which company you deliver food for, you may have some basic coverage already. Most of the time, companies will carry liability insurance for the drivers to protect themselves from large lawsuits. Below is a list of some of the most popular delivery services and what coverage they provide their drivers when they sign up.
- Amazon Flex/AmazonFresh/Amazon Prime Now. Amazon covers its drivers with $1 million in liability insurance, $1 million in uninsured/underinsured motorists, and $50,000 for comprehensive and collision over what your personal policy covers.
- Caviar. Caviar provides drivers with up to $1 million coverage per accident toward medical expenses, a $100,000 accidental death benefit, $100,000 in survivor’s benefits, and a $500 weekly benefit for accidental disability.
- DoorDash. DoorDash drivers have up to $1 million in liability coverage after your insurance has paid out.
- Postmates. According to The Zebra, Postmates provides their drivers $1 million liability above their personal coverage.
- UberEATS. Drivers working for UberEATS are provided $1 million in liability coverage, $100,000 per accident, and $25,000 for property damage.
How Young Drivers Can Lower Their Food Delivery Insurance Premiums
Teen drivers are the hardest hit for auto insurance when their vehicle is used for food delivery as they already face the highest premium rates. There are three main ways that they can lower their premium rate.
- Take a driving course. Certified driving classes can provide an added discount on premiums.
- Obtain a good student discount. Drivers can get up to a 25% discount if they maintain a GPA of 3.0 or higher.
- Driving a smaller, less expensive vehicle. SUVs carry higher insurance rates since they are most expensive to replace than sedans, according to Investopedia.
While your credit score, driving record, and location will dictate your premium, on average, you can expect your insurance bill to increase up to $225 per month for delivery add-ons.
Insurance Companies that Provide Delivery Coverage
Many insurance carriers provide coverage for those who deliver food, either as a primary source of income or as a side hustle. Some of the best companies that offer commercial policies for delivery drivers include:
- AAA. This company provides coverage for drivers who use their vehicles to deliver food or medicine.
- Allstate. This company provides special coverage options for drivers who use their personal vehicles to deliver food or other goods.
- Farmers. They offer a business-use designation for personal vehicles used to deliver groceries, pharmacy deliveries, or food.
- Liberty Mutual. They have recently expanded coverage to provide food delivery insurance for drivers who use their vehicles to deliver food or medicine.
- Nationwide. Nationwide offers policies for delivery drivers who use their personal vehicles for work.
- Progressive. Progressive encourages buyers to inquire about their policies, as they are expanding their coverage for delivery drivers.
- Safeco. This company is under the umbrella of Liberty Mutual. It now offers personal auto policies designed for drivers who use their personal vehicles for delivery. However, their policies exclude those who deliver for transportation networks or online delivery platforms.
- USAA. While there is no mention of insurance for delivery drivers on USAA’s website, recent information from their newsroom states that they will soon expand their current coverage to bring affordable options to drivers who use their personal vehicle for deliveries.
- GEICO. GEICO’s comprehensive policy provides coverage to their drivers no matter the reason they’re on the road. This protection also extends to gig delivery jobs.
- State Farm. State Farm offers ridesharing coverage and does not require drivers to purchase separate coverage if they occasionally deliver groceries or food.
- Erie. Erie gets top marks when it comes to the coverage they provide for delivery drivers. While they do offer inexpensive rideshare coverage, most drivers will need to add a notation to their policy that they use the same vehicle for the occasional delivery.
If you deliver food or other items as a part-time or full-time job, ensuring that you have proper coverage is crucial to stave off financial problems in the event of an accident. Always start by talking with your current insurance carrier, but don’t be afraid to get some quotes to ensure you get the best rate.
Check this out if you need additional information, resources, or guidance on car insurance.
Sources:
Best Delivery Driver Insurance Companies
Food Delivery Drivers and Car Insurance
Food Delivery Auto Insurance (Rates + Requirements)
Car Insurance for Delivery Drivers
Commercial Auto Insurance Cost: Everything You Need to Know
Lyft Insurance: Everything You Need to Know
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