There’s no doubt that we live busy lives. Whether we are at work, traveling, or simply getting the kids to soccer practice, a new array of restaurant delivery and rideshare services makes taking care of everyday tasks easier than ever before.
Furthermore, services like Shipt, Doordash, Uber, Instacart, and others offer a genuine side job opportunity for those looking to make a little extra cash. While this might seem like a great way to pay off bills or save for a vacation, it does come with a risk—your car insurance might not cover you if you’re using your personal vehicle.
Here’s what you need to know about car insurance for food delivery and rideshare services.
Personal Auto Insurance Doesn’t Include Business Use
The first thing you need to know about car insurance and these delivery services is that personal policies don’t typically cover business use. As you can probably tell, working as a driver for one of these companies would be considered a commercial activity. Thus, if you’re using your vehicle without making other arrangements first, you might not have auto insurance while on the road.
If this sounds scary, it should. Not having insurance could leave you financially responsible for not only your vehicle but someone else’s and their medical bills if you’re involved in a serious accident. It could also leave you vulnerable to legal ramifications for not having valid coverage. Yikes!
There Might Be Additional Coverage Through Your Employer
Of course, your employer wants you to be protected while on shift. That’s why they usually offer a tiny amount of additional coverage without any cost to you. For local businesses or restaurants, the policy is typically called hired and non-owned auto insurance. This type of policy gives you a minor amount of liability coverage while you’re working and using your personal auto. National rideshare and food delivery services also have a similar form of supplemental coverage. However, it is important to remember that these additional policies don’t typically include any damage to your car. Instead, you would have to pay for repairs out of your pocket.
Watch Out for Gaps in Coverage
It’s also important to watch out for potential gaps in coverage. Some of these supplemental policies only cover your vehicle while you’re actively in the middle of a delivery or have a passenger in the backseat. That means that during those times you’re waiting for a new assignment, you might not have any coverage at all. This is why it is always best to discuss your situation with your local agent to ensure there are no instances like this one.
Is Carpooling Considered Business Use?
Keeping all of the above in mind, many people then wonder if carpooling is considered business use. The answer is no. The distinction here is that carpooling generally involves people that you know—i.e. your coworkers, friends, or extended family. And, typically, there’s no exchange of money. If this starts to happen on a regular basis or you start to ask for payment for your services, it would be considered commercial use and you would need to talk to your agent.
Get in Touch with Your Local Wisconsin Insurance Agent
Of course, there are far more variables to coverage than we can name in a blog post. That’s why it is important to get in touch with your local agent and discuss your situation, any supplemental coverage, and your current policy
Ready to learn more? Our Lillie-Couch Insurance team is here to help you out. Please contact us today to schedule your no-obligation policy coverage appointment.
