Will My Auto Insurance Policy Cover Me for Delivering Food?

Everybody seems to have a side hustle these days, and for a good reason. Compared to 1995, $100 has a buying power of only $64.37 today. It’s a trend that’s projected to continue.

The still-raging COVID-19 pandemic has also punished the job market. Canada lost over 2 million jobs in April 2020, and only 55% of those had been recovered. One million of those job losses were in Ontario alone.

There was an upside for side hustlers, though. Restaurant restrictions have made ordering takeout a preferred option. And though there is now limited onsite dining, patio season won’t last forever, and for most restaurants, that’s the majority of the social distance space they have. So, delivery apps like Uber Eats, Door Dash, and Skip The Dishes are likely here to stay.

If you’re thinking of being a food jockey, have you considered how it may affect your auto insurance?

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How Using Your Vehicle for Business Impacts Insurance

Once you begin delivering for money, your car is considered a commercial vehicle. Your personal auto insurance policy no longer covers it.

Drivers who make a claim without commercial coverage are treated like they have no insurance at all. Are you thinking of going without coverage? Driving without insurance is a bad idea. It exposes you to the costs of paying for damages for your automobile and possibly the other driver or structure you hit if you have an accident, as well as the costs associated with injury to yourself or others. On top of that, your insurance may be cancelled, and criminal charges laid.

A commercial auto policy differs from a personal policy in many ways. Commercial auto insurance policies include, for the most part, the same mandatory coverages and offer the same optional coverages as the auto insurance policy you have for your private, personal-use automobile.

A commercial policy is more expensive. It’s impossible to make a blanket statement about how much, as there are many factors taken into account when calculating premiums, including:

  • The Blue Book value of the vehicle
  • Its intended use
  • Modifications or unique features
  • Distances covered
  • Unique needs of the business

Of course, there are dozens of endorsements (also known as riders, or, in Alberta, Standard Enforcement Forms) available to tailor coverage to your specific needs. And since the delivery business has taken off, some insurers are offering riders for personal auto insurance to cover food delivery.

Do Food Delivery Companies Provide Any Coverage?

Some food delivery services offer coverage for while you are working for them. A caveat: This coverage can have unexpected limits. For example, it may only cover you while you have food in the car, not when driving to pickups, and vehicle repair and replacement coverage might not be adequate. And, of course, some will offer no coverage at all and will require you to have a commercial licence.

Here are what some of the leading food delivery services offer in terms of insurance:

  • Door Dash offers excess insurance to drivers. But it only covers damages to third parties, and it only applies when there’s food in the car. You’re on your own for your damages.
  • Skip The Dishes, now owned by British food delivery company Just Eat, considers its drivers contractors who are responsible for getting coverage.
  • Uber Eats, with its relatively long ride-sharing service experience to build on, offers its drivers coverage through Economical Insurance in Alberta, Ontario, Quebec and Nova Scotia.

The landscape is now teeming with grocery stores, pharmacies, florists and food kit services offering delivery in the wake of the pandemic. It’s impossible to navigate them all in this space, but here a few things to consider:

  • If you’re an employee of the store, and you’re driving a company vehicle, you should be covered under the company’s fleet plan, but ask to be sure.
  • If you’re an employee using your vehicle to make deliveries for the store, your personal policy won’t cover you unless your employer offers excess coverage. And, as pointed out, that can be minimal.
  • There’s an endorsement for almost anything, from operating another’s vehicle to allowing someone else to use yours. Consult your insurance provider to find out what options are available to you.

If you choose to use your car to deliver food or other goods, take a few minutes to compare commercial car insurance policies and premiums to find the lowest possible rate you can get.

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