If you’ve been laid off, or if you’re simply looking for flexible income, working for DoorDash, Grubhub, Uber Eats, or a similar company may seem like the perfect opportunity. But have you considered what could happen if you get into a car crash? Here’s what you need to know about auto insurance.
The Rise of Delivery
Delivery apps like DoorDash have changed the way people eat. Even before the pandemic, these services were gaining popularity. Now the coronavirus has led to increased demand for food delivery services.
In April, the CEO of DoorDash said that Dashers – what the company calls its drivers – earned over $22 per active hour, based on a nationwide average. That’s an increase of $5 per active hour compared to the previous year.
But every time a driver makes a delivery, there’s a chance he or she will be involved in a crash. And as new workers join the ranks of gig workers, they may not understand the car insurance policy issues.
Commercial vs. Personal Auto Insurance
Businesses need commercial auto insurance, but most people carry personal auto insurance. The distinction seems clear, but it can get tricky when people use their personal vehicles for commercial purposes.
Personal auto insurance policies typically exclude commercial activities. Although your commute to and from work will typically be covered, other activities related to work – such as making deliveries and gig work – might not be. Lying about gig work (or failing to disclose it) could also give the insurer reason to cancel your car insurance policy.
If you get into a crash while working, your personal insurance policy may reject your claim. That can leave you on the hook for any property damages and injuries that result. As a result, you could be sued by the other driver. If your car is damaged, you could have to pay for the repairs yourself – and if you can’t afford to, you might find yourself without a vehicle or a way to earn an income.
Company Coverage Can Leave Gaps
Gig work companies may provide some insurance coverage for workers. However, don’t assume that you’re fully covered. The coverage provided by the gig work company may be very limited.
Ask yourself the following questions.
- Do you have all the types of coverage you need? You’ll need liability insurance in case you hit another person’s car – but what about your car? Make sure you have coverage in case your car is stolen, wrecked or flooded while working.
- Are there time gaps? For example, you might be covered when your bringing food to a customer’s house, but are you covered when you’re driving to the restaurant? Check the fine print.
Coverage details will vary depending on the company you sign with, but you shouldn’t expect it to provide full coverage for your vehicle. You will need your own insurance policy, and it’s smart to get one that fills in all your coverage gaps.
Don’t Wait Until There’s a Problem
Think about how the following scenarios could upend your life:
- Your vehicle is stolen while you’re making a delivery.
- You hit a deer while making a delivery, and your vehicle is totaled.
- Your rear end someone while hurrying to a restaurant to pick up food. Your vehicle is damaged, and now the other driver is suing you for neck injuries.
You depend on your vehicle. Make sure you’re also protecting it with the right insurance coverage.
Although it used to be difficult for gig workers to find auto coverage, this is changing. Gig work has been around long enough for insurance companies to start adapting, and some now offer policies designed for gig workers. Do you have the correct auto insurance coverage? Get a quote today and make sure to tell us if you’re delivering food, so we ensure that you get the best coverage.