It’s hard to imagine what life would be like without a smartphone. With the tap of a screen, we can now order dinner and a ride to the airport with little or no effort. Who would have thought this would even be possible a decade or two ago?
Further, it is also possible to pick up a side job working for one of these services. Drivers for Shipt, Doordash, Instacart, and Uber usually make a fair amount of cash for only a few hours of work. This is why the profession is growing in popularity among those who want to pay down debt or save up for a new car, vacation, or something else.
However, there is an added risk associated with using your personal vehicle in this line of work—you could be voiding out your auto insurance. Keep reading to learn about car insurance for food delivery and rideshare services.
Oh No! Your Auto Insurance Doesn’t Cover Business Use
It might come as a surprise, but your personal auto insurance policy doesn’t include business use. That means if you’re using your vehicle while working as a delivery driver, you might not have any insurance coverage while you work.
What does this mean? It means that if you’re in an accident, you could be responsible to pay all damages out-of-pocket or risk having to face a hefty lawsuit. When you take into account the cost to repair your vehicle, the other person’s car, and any medical bills, this could add up to thousands or hundreds of thousands of dollars.
Your Employer Might Offer Supplemental Coverage
Of course, you’re not totally left alone. In most cases, your employer might offer some form of additional coverage. This can either be called owned and non-owned insurance, or it can be a separate type of supplemental policy. This usually depends on whether you’re working for a national company or a local business. Either way, this type of insurance generally only covers a small amount of liability if you’re in an accident. It does not usually include damage to your vehicle, which would mean you would be responsible for repairs on your own.
Gaps in Coverage? It’s a Possibility
Another thing you need to be aware of is the potential for a gap in coverage. Most supplemental policies only cover your vehicle when you’re on a specific assignment or have a passenger in your car. This means that while you’re waiting for a delivery or another fare, you might not be covered. If an incident happens during this time, you would again have to pay for damages yourself. This is why it is important to talk to your local agent about what your employer is offering and how it fits in with your coverage.
Can Carpooling Void Your Car Insurance?
This is a very common question. Typically, carpooling does not void your car insurance because there’s no commercial use. Why? The people you transport while carpooling are generally friends or coworkers. Plus, there’s not usually any money exchanged, which is a very important distinction. However, if you start to charge or find yourself carpooling regularly, it is a good idea to have a conversation with your local agent.
Why It’s Important to Talk to Your Agent
If you’re still a little confused, it might be a good idea to talk to your local agent. In fact, a coverage review is incredibly important if you’re thinking about working as a delivery or rideshare driver. That way you can make sure you’re covered when you need it most.
Are you ready to learn more? Our Heinen & Associates insurance team is here to help. Get in touch with us today to schedule your no-obligation coverage review.