Dashing for work? Make sure you’re covered
There’s an estimated 5 million platform gig workers in the United States, driving for platforms like Uber, LYFT, DoorDash or Instacart. That number shot up 170% during the pandemic, from about 1.8 million in 2019 to 4.9 million in 2021.
Using your personal vehicle in a professional capacity, however, comes with an added layer of responsibility. Your auto insurance might not carry over to provide coverage if you’re driving for work.
Here’s a few important things to keep in mind if you’re driving for a transportation network company.
Personal policy for personal driving
Your personal auto policy is just that — it covers you, and your car, for personal use. A lot of policies won’t automatically cover you for work in a ride-share or delivery service capacity. That’s your Uber or Lyft driving, or your DoorDash or UberEats driving, or any of these transportation network companies.
It’s up to you to make sure you have the proper coverage. Unfortunately, these transportation network companies, or delivery services, aren’t required to tell you what type of insurance you’ll need or verify that your vehicle is covered if you’re in an accident while on the job. A lot of times that information doesn’t get explicitly explained, and there’s serious, expensive consequences.
Covering yourself
If you’re using your personal car as a delivery driver, there’s a few options to make sure you’re covered.
A standalone commercial policy is one option. That’s separate from your personal policy, and it could cover damages not covered under an employer’s commercial policy and endorsements. You can add it to your existing personal policy, and it could help mitigate out-of-pocket expenses, like deductibles, if you’re in an accident.
Some insurance companies offer an endorsement to provide this coverage. You can check with your insurance company to see if it’s available; the average cost for adding a rideshare endorsement to your policy is about $94 (every six months).
On the business’ side
Now, most delivery service companies do have some form of commercial auto insurance for their drivers — but, there could still be gaps in coverage.
For example, the company’s policy might only provide coverage after the food has been picked up by the driver — which means any auto accidents that happen on the way to the restaurant to pick up the food might not be covered.
Another wrinkle could be a company that provides third party liability coverage for its drivers — which would cover property damage and injuries to others, but NOT first party coverage like collision or personal injury protection. That means, essentially, if you’re in an accident, the company’s insurance would cover the car you hit and its occupants, but you (the driver) would be responsible for paying the damages to your own car.
DoorDash, for example, does provide third-party liability coverage for its drivers, but its website says drivers need to maintain primary auto insurance with the state’s legal minimums — and it only kicks in if the driver’s auto policy has already denied the claim in writing.
On the other hand, Uber offers coverage to repair your car if you’re in an accident while on a trip, as long as you have comprehensive and collision coverage on your personal auto policy.
Doing your homework
If you’re worried about what whether your policy will cover certain activities, it’s important to read that policy carefully and contact your insurance agent or insurance company to confirm. If you don’t have the right auto insurance for delivery work, you could get stuck with a big bill if you’re in an accident.
Make sure you know before you get behind the wheel exactly what type of coverage you have — from the company you’re working for, and from your own policy. It’s never a bad idea to check with your agent beforehand.
