Were you aware that your auto insurance may not cover you if in an accident while delivering for Doordash?
Do you need special insurance like commercial auto? Are you uninsured when delivering? Does Doordash have your back? Who covers what if you are in an accident? How do you find out? Let’s look at how car insurance works for independent contractors when delivering for companies like Doordash.
Personal Car and Auto Insurance Policies and Doordash Delivery
I don’t know why Doordash doesn’t tell you this: you probably aren’t insured while delivering for them.
Most auto insurance policies have a list of exceptions or exclusions included in the policy. A lot of the policy includes all the things the insurance covers and what time of coverage, but there’s a big old BUT at the back. It’s basically saying, we cover all of this BUT this, this and this. With most insurance companies, delivery work is one of those “buts. “
It’s not just Doordash. It’s any delivery app. This is even true if you are an employee for some sandwich or pizza shop. This goes into a little more detail on the issue. In a nutshell, most policies will say they do not cover the vehicle while it is being used for commercial purposes or for “livery” (the transportation of goods or passengers for hire). If you have an accident while on delivery, you are on your own.
Doesn’t Doordash Provide Commercial Car Insurance?
Doordash does not provide any car insurance to their dashers. Sometimes you will hear that they do, however I challenge anyone to produce the policy. Look for the waybill. Look for anything that indicates there is actual coverage for you.
It doesn’t exist.
Here’s what Doordash does say about the topic on their website (accessed March 2, 2020):
Doordash has liability coverage, but there’s a possibility it won’t cover you.
Doordash does state that they “provide excess auto insurance for Dashers” but it is liability only. What that means is, it only applies to bodily injuries or property damage that you cause to someone else. “Damages sustained to your vehicle in an auto accident are your responsibility and should be addressed by your auto insurance carrier directly.”
This is not a policy that is in your name. It is not coverage for you. It is NOT commercial auto insurance. Basically what it amounts to is liability insurance to cover Doordash if anyone comes after them for damage that goes beyond whatever insurance you have. The coverage only applies if you exhaust all options from your own auto insurance.
Here’s an important line in that statement that you HAVE to be aware of: “If you fail to maintain your own insurance, Doordash’s coverage may not apply.” This is important. It’s an escape clause for Doordash and their insurance. If you are uninsured, Doordash may not step in here.
But wait, you have an insurance policy, so you are insured, aren’t you? If your policy excludes delivery, that’s as good as being uninsured. What that means to you is, you may be completely on your own.
Do you have the cash to pay for the damage to someone else?
And you are on your own with your own vehicle and injuries.
This is a problem if you owe money on your car or if you are leasing the thing. If your car is damaged, they’re going to either insist that you get it fixed (on your own dime) or pay off the balance of the loan. They won’t let you continue to make payments.
Do you have that kind of money?
How to Make Sure Your Auto Insurance will cover you while you Dash for Doordash
I recommend three steps that you take. You can read more here.
- Check with your insurance. Find out if you are insured.
- If NOT insured, ask for options.
- If there are no options with your current policy, find a policy that will cover you.
This may be a time where you may have to ask if being a Dasher is worth it. Will it cost a lot extra? Sometimes the cost is minimal. Sometimes it’s substantial. It all depends on things like your driving record, your credit, and where you live. I’ve heard that insurance is prohibitive in some states.
DO NOT continue delivering if your policy doesn’t cover you. It’s not worth the risk. Don’t rely on lying to the insurance company and claiming you weren’t delivering. Now you could be adding insurance fraud to your list of problems.
Check with your insurance.
You might start with reading your policy. Search for the exceptions or exclusions. Look for terms like “Livery.” For example, my personal policy read that they don’t provide coverage “for that “insured’s” (meaning me) liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyence.” If you see “livery” or “commercial use” or anything like that, you pretty likely are not covered.
If you don’t find anything or are not sure, you can call your insurance and ask them. Say something like “I’m considering this opportunity (delivery) but want to make sure that I would be covered if I take it.”
Ask if there are options
Some insurance companies have add ons, sometimes called riders or endorsements, that will provide coverage that might otherwise be excluded.
A common such endorsement is called a rideshare endorsement. DO NOT ASSUME that a rideshare endorsement will cover delivery. I’ve heard of some companies providing such an endorsement that does include delivery, some others that don’t. In fact I went all the way through a quote process with one company with the understanding that they did provide coverage only to find out that delivery was still excluded. You need to ask them to dig into whether delivery for Doordash is covered.
If your insurance doesn’t have any options, as mine didn’t, you have a choice to make: Change insurance or don’t deliver any more. I know the money is attractive, but delivery doesn’t pay enough to make it worth the risk.
You have two places to look. I suggest looking at both:
- Search for a personal insurance policy that will cover you.
- Find a commercial policy.
If you have other drivers, other vehicles or other kinds of insurance (like home owners) the personal option would be preferable. Usually you can get discounts by bundling coverages. Two years ago, I switched to Geico Commercial for my car. The policy itself wasn’t a lot more than I’d have been looking at for an individual car on a personal policy, however not having the multi-car discount or the bundling with homeowners did end up costing extra.
The problem is, where do you find these policies? I write about this stuff and I have a hard time finding who provides coverage. My advice is, find someone who works with multiple options. Find an independent agent who works with several insurance companies. There are a number of options out there that are able to gather your information and find a commercial policy that would work for you.
If you’re not sure where to look, here’s two recommendations I would make:
I have a lot of respect for Dave Ramsey, a national personality that talks about personal finances. He puts together a list of what he calls Endorsed Local Providers that he vets. Now I’m pretty sure he gets referral fees for his endorsements, but I don’t have a problem with that personally if that means I can find someone who will do a good job. I do NOT have an affiliate relationship here, so there is no revenue that comes to me for this link. You can go here to get a recommended independent agent.
Another option you can check out is a referral network. There are a number of networks that work with multiple agencies. They can get your information and then put you in touch with a company that offers commercial insurance. They are different than an independent agent in that they cannot put together competing quotes or really help you compare companies. However, when it comes to just FINDING a company that offers commercial policies in your state, that can be a valuable service. One that I have used is CommercialInsurance.net. This link IS an affiliate link, meaning that getting quotes may lead to a referral fee that helps keep this website active. In fact, I used another similar company to compare the experience and that company actually transferred me to CommercialInsurance.net.
Insurance is one of those necessary evils
There are a lot of factors that play into this whole insurance thing. As you deliver for Doordash, you have a little higher chance of getting into an accident. The Dasher App can certainly increase the risk of distracted driving – having the annoying notification thing go off while you are on the road. You drive more miles. You pull in and out of traffic more frequently. This is why a lot of insurance companies want nothing to do with us.
But this isn’t necessarily a pro-insurance stance by any means. Here’s the thing: we all know that an insurance company is going to do anything it can to get out of paying out an insurance claim.
Make sure you aren’t giving them a ready-made excuse to do exactly that. Make sure you are properly insured.