Best Car Insurance for Delivery Drivers
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Delivery driver insurance guide
If you’re delivering food for services like UberEATS, DoorDash, Postmates, or Seamless, it's crucial to understand a key rule of auto insurance: using your vehicle for business or transporting goods typically isn’t covered under a standard policy.
Not without the proper endorsement, anyway. Delivery drivers must carry their own personal auto insurance policies, as well as an add-on that offers protection while on the job. Or, you can opt for a commercial car insurance policy.
However, figuring out which insurance covers you during different phases of your delivery can be confusing. Our guide breaks down the details to help you navigate delivery driver insurance with ease.
Will personal car insurance cover food delivery?
Because delivery drivers use their vehicles to transport goods, i.e., food, the act of making deliveries may fall outside typical personal auto insurance policy guidelines. If you are involved in an accident while driving for a delivery service and have only a personal auto policy, you risk having any corresponding claim denied. Two insurance coverage options could work:
- Business-use: An add-on option for a personal policy, designed for minimal business use.
- Commercial policy: Designed to cover businesses and their vehicles.
Commercial and business-use policies are designed to cover the risks associated with food delivery and other commercial uses. Working as an independent contractor — as a delivery driver — creates some unique circumstances that most insurance companies will not cover under a personal policy.
Do you need special insurance as a delivery driver?
In short, yes. Firstly, any vehicle driven or parked on public roadways must be insured with state-minimum liability insurance. It's stated within Postmates' onboarding materials that all drivers must maintain or exceed their state’s liability insurance limits. In order to be fully protected as a delivery driver, though, you must add on a rideshare endorsement or enroll in a commercial auto insurance policy.
Do delivery services provide insurance coverage for drivers?
It depends. Each delivery company is unique in how it structures its coverages— some offer no coverage during any phase of delivery, while others' protection will kick in only when you have picked up goods. Before understanding the coverages of each service, let's first define the delivery phases these companies use to determine status:
- Phase 0/Offline: The driver is logged off the delivery service app. In this phase, your personal auto insurance policy is in effect.
- Phase 1: The driver is logged in to the delivery app, available and awaiting an order.
- Phase 2: An order has been accepted and the driver is en route to pick up the goods.
- Phase 3: The driver has acquired the order and is transporting the goods to the destination.
In periods where the delivery service does not offer coverage, your personal auto policy with business use endorsement or your own commercial policy will cover you.
See the table below to see how each delivery service insures its drivers. Or, expand the sections to discover more details on the coverages offered.
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Postmates insurance coverage
Postmates states responsibility for all vehicular damages falls on the driver. However, the platform may step in when a driver's coverage does not cover the damage inflicted on third-party vehicles.
Postmates car insurance assistance includes:
- Excess auto liability — $1M: per-accident limit for bodily injury and/or property damage to third parties.
- General liability — $1M: applies to Postmates couriers who make deliveries by foot or bicycle, covering damage caused to others or their property.
Postmates does not cover a driver's vehicle or bicycle, and the company doesn't offer workers' compensation. Postmates outlines drivers must use their own coverage to cover vehicular damage. This can be complicated, as working for Postmates may require a commercial insurance policy.
Uber Eats insurance coverage
Uber Eats offers coverage in certain phases of delivery. In Phase 1, Uber Eats insurance will cover liability only coverage if your personal insurance will not cover you in this phase.
Phase 1: While logged into the app and awaiting pickup, Uber Eats will cover liability up to certain limits: $50,000 in bodily injury per person, $100,000 bodily injury per accident, and $25,000 in property damage per accident.
Phases 2 & 3: When en route to pick up deliveries and during trips, Uber Eats covers up to $1 million in third-party liability coverage, as well as contingent comprehensive and collision coverage. Comprehensive and collision coverages are only supported if you already have full coverage on your personal policy. Uber Eats will pay out up to the actual cash value of the car with a $2,500 deductible.
Doordash insurance coverage
Doordash only provides auto insurance to drivers while in phases 2 and 3, and only after the driver has gone through personal insurance and a claim has been denied.
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Delivery driver car insurance options
As a food delivery driver, you can acquire a commercial car insurance policy, ask whether your provider will provide coverage via a business-use personal policy, or — this is not recommended — fail to report your occupation to your insurance company*.
Commercial policies can be slightly more expensive than personal policies. However, the price will depend on your personal attributes and your vehicle. With a commercial policy, you can rest easy: any incident you encounter will be covered.
A business-use policy is for drivers who use their vehicles for limited business use. If you’re a full-time Postmates contractor, you might not qualify for this coverage. If you’re curious, speak to an insurance agent.
Declining to report your occupation as a delivery driver has its risks. You risk having your coverage canceled or having subsequent insurance claims denied. Honesty is always the best policy — don't get caught uninsured!
The best option is to speak directly to an insurance agent. The emergence of on-demand delivery services has created a unique situation for even the best auto insurance companies. Reach out to our team of licensed agents to get started with delivery driver insurance!
Car insurance for seasonal delivery drivers
If you choose to drive for a delivery service like UberEATS, Doordash or Postmates seasonally— whether it be around the holidays to make some extra cash or just in the summertime while driving conditions are fair— you still need to protect yourself with insurance. Your best bet is to add a business use endorsement to your personal auto insurance for the time that you will be driving for delivery. You can add and drop endorsements with your personal car insurance carrier by contacting your insurance agent or amending your policy online, depending on what services your carrier offers. Endorsements cost extra to apply, but it is in your best interest to protect yourself and your vehicle with the right coverage. Add on business use coverage before you start driving for the delivery service and cancel the endorsement when you are done driving for the season.
Cheapest insurance for delivery drivers by carrier
Adding a rideshare or business use endorsement to your personal auto insurance policy will increase your premiums, but the added protection is well worth it. Each insurer determines its own rates for these endorsements, but the table below highlights the difference between the average premium for a standard full coverage policy and one that includes a rideshare endorsement.
Some insurance companies are transparent about their pricing and coverage options. We've compiled details from top carriers offering rideshare programs, giving you insight into the coverage available for delivery drivers.
Updating data...
| Coverage | Avg. 6 Mo. Premium | Avg. Monthly Premium |
|---|---|---|
| With endorsement | $967 | $161 |
| Without endorsement | $920 | $153 |
Source: The Zebra
Coverage for delivery drivers is included under Geico’s Rideshare Insurance option. What Geico offers is considered hybrid insurance, which replaces a personal auto policy rather than acting as an add-on to existing coverage. Hybrid coverage is unique to Geico; this type of policy covers you whether you are driving for personal reasons or on the clock for any number of food delivery services. Policyholders may drive for several companies at once and deductibles can be as low as $250. Geico’s rideshare coverage is currently available in 40 states.
| Coverage option | States Available |
|---|---|
| GEICO Rideshare Insurance | AL, AZ, AR, CA, CO, CT, DC, DE, FL, HI, ID, IL, IN, IA, KS, LA, ME, MD, MA, MN, MS, MO, MT, NE, NH, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, VT, VA, WA, WV, WI, WY |
Delivery drivers may also be covered with Progressive rideshare insurance. This functions as an add-on to your personal auto policy, so there is no need to purchase a commercial policy unless the add-on is not available in your state. If rideshare coverage is not available where you live, you could always purchase a commercial policy to ensure that you are adequately covered.
Progressive’s rideshare coverage allows drivers to keep their existing policy limits and deductibles whether they are driving for personal reasons or delivering goods for a platform. It is important to note that if the food delivery platform offers its own insurance (which most do) while drivers are actively delivering, you will be covered by that policy first should any accidents occur. Progressive’s insurance would be secondary.
| Coverage option | States Available |
|---|---|
| Progressive Rideshare Insurance | AL, AR, AZ, CO, DC, FL, GA, IA, ID, IL, IN, KY, LA, MA, ME, MI, MN, MO, MS, ND, NE, NM, OH, OK, PA, RI, SD, TN, TX, UT, VA, WA, WI, WV, WY |
State Farm offers what they call Rideshare Driver Coverage for people who drive for apps like Uber or Lyft, but according to the carrier, all you need as a delivery driver with State Farm is a “business use” notation on your personal auto policy. This only applies to drivers who deliver goods and food and never have passengers. If you also drive for hire with passengers, you must obtain the Rideshare Driver Coverage. Adding on the business-use notation to your personal policy is typically more cost-effective than purchasing rideshare coverage. State Farm estimates that adding rideshare coverage will add 15-20% onto your premium.
| Coverage Option | States Available |
|---|---|
| State Farm Rideshare Driver Coverage | AL, AK, AR, CA, CO, CT, DC, DE, FL, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, UT, VT, VA, WA, WV, WI, WY |
USAA offers rideshare gap coverage as an add-on to your personal auto policy. This additional coverage is effective for the “unmatched” period of time. This refers to the time spent clocked in to your food delivery app awaiting a request. You can add this coverage online with USAA or contact your USAA agent. Rideshare gap coverage rates are dependent on several rating factors, but USAA estimates this endorsement will add on as little as $6 per month to your premium.
| Coverage Option | States Available |
|---|---|
| USAA rideshare gap coverage | AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, ME, ME, MN, MO, MS, ND, NE, NH, NJ, NV, OH, OK, OR, TN, TX, UT, VT, WA, WI, WV, WY |
Allstate’s coverage for delivery drivers is called Ride for Hire, and it offers coverage for delivery drivers as well as Uber and Lyft drivers. Allstate partnered with these platforms to offer protection to its drivers. Ride for Hire coverage can be added on to an existing personal auto policy.
Rates for this coverage will vary based on personal factors like age, driving history and location, but Allstate estimates that adding Ride for Hire coverage will add about $30 extra to your monthly premium.
| Coverage Option | States Available |
|---|---|
| Allstate Ride for Hire | AL, AK, AZ, AR, CA, CO, CT, DC, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY |
*Please note that it is your responsibility to inform your insurance company that you drive for a ride-sharing service. Because this is considered a business activity, a standard insurance policy does not provide sufficient coverage. Driving for a rideshare company without a proper insurance policy could leave you at risk for any potential damages and could lead to your coverage being dropped altogether. Please contact a representative at your company to discuss such coverage options.
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