We all live busy lives. That’s why convenience services such as food delivery from your favorite local restaurant or ridesharing apps like Uber and Lyft make things so much easier. They save us time by doing the things we don’t want to do ourselves.
However, they can also be a great way to make a second income. Many people are turning to so-called side gigs to help supplement their income, pay off debt, or save for something they really want like a cool vacation. The problem with this is that they often use their personal vehicle for the job and don’t realize that their auto insurance doesn’t extend coverage while they’re working.
Thankfully, our Leonard Insurance team has put together this quick guide to help you understand the process. Keep reading to learn more about car insurance for food delivery and rideshare services.
Personal Car Insurance Doesn’t Cover Business Use
As a general rule, there is no insurance coverage when you use your personal vehicle on the job. This includes side gig occupations like being a food delivery driver or working for a rideshare service. What this means is that if you’re involved in an accident while working, you could be liable for paying for damages out of your own pocket.
The reason for this is that there are certain insurance rules when it comes to using a personal vehicle during business activities. Doing so is technically considered commercial use and could nullify portions of your policy contract. That’s why it is vital to make sure you have talked to your agent and are covered in other ways.
Your Employer Might Offer Supplemental Coverage
However, it is important to know that your employer might offer some supplemental liability insurance coverage. This means that if you’re in a serious accident while on the clock, they might pay for the damages to another person’s vehicle, any of their medical costs, and additional property damage.
For most restaurants, this is included as part of an owned and non-owned business policy. Other services—such as Uber, Lyft, Instacart, Doordash, and others—provide a supplemental policy. The downside to this is that they don’t typically cover the damage to your vehicle, which means you would have to pay for these repairs on your own.
Beware of Potential Gaps in Coverage
Keeping all of this in mind, it is also important to look for certain gaps in coverage. For example, your employer’s policy likely only covers you while you’re actively making a delivery or transporting a passenger. In most cases, this does not include while you’re waiting for a new assignment or in between delivery jobs. This can easily be a time when you find yourself totally without coverage, and it is important to be mindful of these gaps by speaking with your insurance agent.
Carpooling vs. Business Use
You might be wondering if carpooling constitutes as business use. The basic answer is no. Why? Well, in most instances, you’re likely transporting someone you know. This can be a coworker, a member of your child’s sports team, or even just a friend. It’s also likely that you aren’t charging them for your services. So, it is technically not considered business use. There are a few other rules to consider, so if you start to receive money or regularly engage in carpooling, discuss the matter with your agent.
Delivering Food or Ridesharing? Talk to Your Agent
The bottom line here is that you should always talk to your agent before starting a new career as a food delivery driver or rideshare driver. There are many caveats to how this all works with your personal insurance policy, and it is important to get them sorted out as soon as possible.
Our Leonard Insurance team is here to help you sort out the details. Please get in touch with us today to schedule your no-obligation coverage review appointment.
