What's the best insurance if you drive for Postmates, GrubHub, UberEATS, DoorDash or a similar service?
If you're delivering food for UberEATS, Postmates, Seamless, or a similar service, it's important to remember one of the key rules of auto insurance: using your vehicle for business and the transportation of goods is typically not allowed.
While most Americans have personal auto insurance policies, delivering goods via your vehicle may require a commercial car insurance policy. This begs the question: how should you insure your vehicle as a delivery driver?
Any vehicle driven or parked on public roadways must be insured with state-minimum liability insurance. Failure to maintain active insurance may result in a ticket or license suspension, along with a lack of coverage in the event of an accident. For instance, within Postmates' onboarding materials, the platform states all drivers must maintain or exceed their state’s liability insurance limits.
It depends. Let's look at Postmates as an example.
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:
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.
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 for Postmates:
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.
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 — 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 insurance companies. If you’re interested in speaking to a local agent or have other questions about insurance, call (888) 444-2833 or click below.
