Insurance coverages offered by Uber, Lyft, DoorDash, Grubhub, or similar businesses leave coverage gaps. If driving for a fee is your side gig, whether delivering passengers or dinners, understand your risks and ensure they are covered. Uber paved the way, forcing insurance companies to deal with what they’d created. Many solutions are available now that weren’t just a few years ago. However, misconceptions still exist regarding the risks assumed while driving for such businesses, and how to enjoy making extra cash while not being liable for a claim.
Driving for Business
When insurance companies cover personal vehicles, the coverages and prices assume they will be used for personal use. Most activities fall under this category. However, once a vehicle is used to make money, that is a sure sign of business use. Business use vehicles are driven more often, to more places, and along more unfamiliar routes than personal vehicles. That is why business auto insurance generally costs more than personal insurance. It is also why personal auto policies exclude business use. Thus, if your side gig involves transporting people or food for a fee, know your risks and how to cover them.
Delivery Risks
Though not an exhaustive list, the main business risks associated with rideshare and food delivery include:
- Injuring other people in an accident
- Injuring your own passengers in an accident
- Injuring a passenger, or contributing to an injury, while helping them into the vehicle, load their bags, or out of the vehicle
- Damaging other vehicles or property in an accident
- Damaging your own vehicle
- Injuring yourself (medical bills, lost time at work, lost income, and disability)
Insurance Solutions
Insurance to protect against these risks comes from two primary sources: 1) through the rideshare or delivery service, and 2) through your personal auto policy. Both must be addressed.
1) Rideshare or Delivery Service
Coverage available here is limited. Although these services claim to provide extensive coverage, it often isn’t, and what is provided is tailored to protect their own interests, not those of the driver.
That said, most, not all, rideshare and delivery services provide some degree of liability insurance protection for drivers. But read the fine print. Ensure these coverages protect you in every event you injure other people, passengers, and property while working. We suggest you settle for no less than $1,000,000 protection in this area.
And remember this is liability protection only, meaning it does not cover damage to your own vehicle. This is the responsibility of the driver to obtain on their own.
2) Personal Auto Insurance
Whereas standard personal auto insurance does not provide protection for vehicles used in a business (reference Business-Use Vehicles on a Personal Auto Policy), some insurance companies now offer this coverage for an additional fee. This is where coverage for damage to the driver’s vehicle can be procured. Availability and price differs by insurance company, business operations, state, and local area, so talk to your insurance agent. Explain what services you drive for, how often, and ensure all your risks are covered the way you’d like.
Coverage Gaps
Areas for extra attention.
Loading and Unloading
It happens all the time. Passengers twist ankles on curbs while stepping into a vehicle, stumble trying to exit, or injure themselves simply removing luggage. As a driver, should you be found liable, ensure you understand where this coverage is afforded, whether from the rideshare or delivery service, or from your personal auto policy.
Umbrella or Excess Liability
Even with liability protection, claims can be settled for more than the insurance limits. Personal umbrella insurance is suggested as an extra layer of protection over your personal auto policy.
Injury to the Driver
Because drivers are not employees of the rideshare or delivery service, they are not protected for medical bills, lost wages, or the additional costs of long-term care. Further, this cannot be protected through personal auto insurance. If this risk is of concern, talk to your insurance agent about obtaining the appropriate policies.
Questions on personal auto insurance? Contact us. We will help determine your risks and advise how to cover them. Not a client of ours? Let us earn your business! Each of our clients is assigned a personal insurance agent and provided their email address as well as a phone number that rings right on their desk.
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