The COVID-19 pandemic has created a growing demand for drivers to deliver groceries, medications and restaurant meals. Making deliveries means spending more time on the road, which increases your risk of an accident and your insurer’s risk of paying a claim.
Insurance for a personal automobile used for deliveries differs from covering a car for personal use. You must meet state and employer requirements while navigating through policy exclusions that could nullify your coverage when you need to file a claim.
Do delivery drivers need commercial car insurance or does a personal auto policy provide adequate coverage? Find out below.
Does my personal car insurance cover delivery trips?
In some cases, your personal auto insurance may provide all the coverage you need for business and personal driving. However, if you’re a delivery driver, you will have to comply with company requirements, your state’s minimum coverage requirements and the limits and exclusions of your car personal car insurance policy.
If you use your car to drive to and from work and to occasionally run business-related errands, your personal policy likely provides all the protection you need. However, if you primarily use your car to make sales calls or deliver food or products, your personal auto policy probably won’t suffice.
Your auto policy includes an exclusions clause, which outlines uses of your vehicle that are not covered. Typically, your personal car insurance policy won’t provide coverage if:
- You use your car to provide a limousine or taxi service.
- Your employer leases or owns the vehicle, or it’s registered or titled to your employer.
- You use your car in a professional capacity to pick up and deliver any type of food or goods.
- You let a non-listed driver, like a co-worker or employee, drive your vehicle.
- You lease or rent your car to someone else.
- You own a truck, utility vehicle or van that exceeds 10,000 pounds or has a hauling capacity that exceeds 2,000 pounds.
- Your automobile is equipped with business-related gear, such as a hydraulic lift or cooking equipment.
Even if your insurer doesn’t exclude the way you use your vehicle for work, you’ll need to comply with your company’s insurance requirements and purchase the minimum levels of coverage your state requires.
What insurance types or add-ons will cover delivery services?
Some insurance providers offer policies that cover your vehicle for business and personal use, but you must state your usage when you purchase coverage. For example, Allstate writes business-use policies if you use your personal automobile to:
- Deliver goods or transport people for a fee
- Travel between more than one location or to remote areas for work
- Carry work equipment or tools for business purposes
- Visit clients in their homes or offices
- Transport clients, co-workers or employees
A business-use policy won’t provide the same level of protection as a commercial auto insurance policy. Commercial auto policies, called a Business Auto Coverage Form, assess your vehicle’s risk at a higher level and provide higher levels of liability coverage, typically $500,000 or more.
BACFs can cover cars, trailers, trucks and vans. Businesses can purchase a BACF for:
- Vehicles owned by the business
- Automobiles hired or leased
- Other vehicles that the business doesn’t hire, lease or own
Typically, companies purchase the latter type of BACF coverage if an employee uses the vehicle for business and personal use because it limits the business’s liability. BACF policies provide the same basic coverage as personal policies do, including:
- Bodily injury liability
- Property damage liability
- Medical payments (personal injury protection in some states)
- Collision
- Comprehensive
- Uninsured and under insured motorist
Required coverage vary by state. States don’t require collision and comprehensive coverage, but leasing companies and lenders do for leased and financed vehicles.
Does every state have the same rule on food delivery insurance coverage?
Meeting insurer requirements is just one auto insurance hurdle for delivery drivers. They also must meet state and company requirements.
Among companies that hire delivery drivers, insurance requirements vary. If a driver delivers food, they may have additional requirements:
- Amazon Flex requires all drivers to carry a personal auto insurance policy. Except for New York drivers, Amazon purchases all drivers an Amazon Commercial Auto Insurance Policy, which includes liability, collision, comprehensive and uninsured and under insured motorist coverage. The Amazon policy only covers the contracted driver and only covers accidents that occur while the driver is making deliveries.
- Instar doesn’t purchase auto insurance for its drivers but requires each driver to carry a personal auto policy with overages required by his or her state.
- Doordash covers its drivers with a commercial auto insurance policy that includes up to $1 million in bodily injury and property damage liability coverage. The Doordash policy only covers the driver’s vehicle while on an active delivery. All Doordash drivers much also carry a personal car insurance policy.
To meet the increased demand for food delivery drivers during the COVID-19 pandemic, many state departments of insurance have recommended insurers to relax or suspend some policy exclusions.
The following examples don’t represent new requirements in all states. If you’re seeking a delivery driver job, ask your auto insurance carrier about specific requirements.
- Alabama and Montana have encouraged providers to expand personal auto insurance coverage to cover vehicles used to deliver food, medicine and when used to provide other essential business services.
- Colorado requested that insurers provide coverage for new, unnamed restaurant delivery drivers on existing commercial auto policies. The Mile High State also asked carriers to cover restaurant delivery drivers who hold a personal auto policy but aren’t covered by a commercial auto policy. The special pandemic allowance doesn’t apply to drivers who delivered food prior to the state’s COVID-19 public health order or to drivers whose delivery activities weren’t affected by legislated restaurant closures.
- Pennsylvania asked insurance companies to cover customers who hold a personal auto policy when using their vehicles to deliver restaurant food and life-sustaining medications.
- Rhode Island advised insurers to remove delivery exclusions on personal auto policies for all types of deliveries.
- Tennessee’s insurance commissioner requested that insurers allow restaurants to retroactively add new delivery drivers to their existing commercial auto policies and to make commercial auto insurance available to restaurants that hold a general liability policy.
The new allowances vary by state. Many state departments of insurance made open-ended requests. Nobody can accurately predict the course of the pandemic or if states will impose further lockdown measures in the future. Folks who take temporary delivery driver jobs during the pandemic should consult with their employers and insurance companies to determine the coverage they need.
Simplified
- Insurers, employers and state laws determine the levels of coverage and type of auto insurance policy a delivery driver must carry.
- Businesses require delivery drivers to hold a valid personal auto insurance policy, but some also provide commercial auto insurance, which covers a driver’s vehicle while on the job.
- To accommodate the demand for more deliveries during the COVID-19 pandemic, some insurers have relaxed exclusions to cover delivery driver’s vehicles with existing personal auto insurance coverage.