If you have lots of money and you are okay with just getting it taken away from you, go ahead and ignore this article. If you own your own home and are okay with it just being taken from you, go ahead and ignore this article. If you have car payments and feel like you are okay losing your car but still having to pay off those payments, go ahead and ignore this article. If you can afford to just pay out of pocket for someone else's medical costs, even up to hundreds of thousands of dollars, go ahead and ignore this article.
I don't know about you, but I don't have hundreds of thousands of dollars I'm willing to give away. I don't even want to give away tens of thousands. Most of us who are doing independent contractor work probably wouldn't be doing it if we had that kind of cash.
So if you don't have that kind of money lying around, why are you driving around uninsured?
So, if you don't have that kind of money lying around, why are you driving around uninsured? You probably didn't realize you were uninsured, did you? After all, you had to submit proof of insurance, when you signed up, right?
The thing is, these companies require proof that you have personal insurance. They don't require you provide proof that your insurance covers delivery. And they are causing you to drive around uninsured without you even knowing it. That's pretty scummy of them, in my not so humble opinion.
Some of you are insured, but it's a small minority. If all you have is a regular personal insurance policy, you are almost guaranteed to be uninsured by your carrier while driving, and there are huge gaps on any insurance (if any) provided by the apps.
So, DO. NOT. TAKE. A. SINGLE. DELIVERY until you know about your own coverage and until you have made sure you are covered.
Understand the Danger in Relying on Personal Insurance
Seriously, this is super important. From the moment you log in as available on any of these apps, you are uninsured with your personal policy. Your policy is for personal use, the moment your car is offered out for hire (which you are doing when you mark yourself available) the coverage is gone. You. Are. Uninsured.
If you have commercial insurance or an addendum to your policy allowing deliveries, you are safe. It's just the vast majority of delivery contractors don't have that.
Most personal policies put an exclusion in there that you are not covered for any purposes where your car is up for hire – specifically delivery and ride share. You will probably find language that exclusively says you are not covered while doing delivery, or while your car is “for hire” or used in “livery” which according to insurance definitions, means ” being used to transport people and/or goods for hire.”
Bottom line? If you do not have special insurance or an addition to your insurance that allows delivery work, you are almost guaranteed to be uninsured when it comes to your own policy.
But the apps provide insurance, don't they?
Maybe. Maybe not.
Grubhub drivers, you are the most at risk. Grubhub provides no additional insurance. Period. That means if you get in an accident AT ANY TIME YOU ARE ON THEIR APP, your insurance doesn't cover you and Grubhub won't either.
That means you're screwed. Hope you have the money to pay someone else's medical bills, pay for their car, AND pay for your own medical bills and your own car.
Other apps provide a varying degree of coverage. The best coverage is by UberEats, they do provide liability and comprehensive insurance while enroute to picking up your order and while making the delivery. They also have liability coverage while you are logged in but not on a delivery. If I were to say you were safe with anyone, it would be them. But even then, say you drop off your delivery and you are deadheading back to a busy area and get into an accident. Your own car may not be covered. Have a loan on that sucker? The bank is going to want it paid back… you're out the money and now you have no car to show for it.
If you have Caviar, they have maybe the next best insurance. They even have some disability coverage (as of July, 2018) – but they're a bit grey because they just say it's coverage while you're on a delivery. Does that cover when you're en-route to pick up the order? Does that cover you when logged in available but not yet on an order? Doordash and Postmates offer some liability, but no protection for you, your injuries, or your car. Doordash only covers you while you have food in the car, Postmates covers you once you accept an order. Neither provides any coverage while you are logged on waiting for orders.
Important questions about if you should be covered:
Let me ask some questions:
Can you pay to replace your car on your own?
Can you pay for medical bills on your own?
Can you you replace someone else's car on your own? Especially if it's a luxury car?
Can you afford to just pay off your bank loan on your car right now? (and oh, by the way, not have a car to show for it when it's totaled)?
Can you pay the medical bills of someone else involved in the accident?
If your answer is no to any of the above, STOP DRIVING NOW and don't start again until you know for sure that you are covered.
If you get into an accident and are not covered, you can lose anything that is of value in your name. Your car (or what's left of it) – your other cars. Your house. Your savings. A court judgment could wipe all that out.
I Could Just Not Tell Anyone I Was on a Delivery, Right?
Horrible idea. HOR-RIB-LE idea.
You understand that's insurance fraud, right? To cover up the purpose for which you are using your car can get you in even more trouble. Don't do it.
As Mark told me, ” the truth would be exposed on the police report or it would have to be reported to the company they work working for. If they couldn’t get the food delivered they would have to report the incident to Grubhub, Uber Eats, etc. That is not something they would really be able to hide.”
Amen. Amen and Amen. Thank you Mark. He also stated at least a couple of times, it's insurance fraud. Just to make clear, this is a HORRIBLE IDEA.
Look, I'm not doing this to shill for insurance. It's more because I know that they will do everything they can to get out of a claim. If their policy says specifically they don't cover you when doing delivery, what do you think they're going to do? They're going to look for evidence that you were on a delivery.
And they will find it. Look, we hope there never is an accident, but when one happens, especially one that's bad enough where the payout from insurance is going to be huge, you're not going to be in a position to hide the delivery bags, right? Don't take that chance. Don' rely on being able to lie to your insurance, it's just a bad idea.
A horrible idea at that.
How Do I Know if My Personal Insurance Covers Me?
Mark Rodgers, an independent agent who operates Trailstone Insurance in Littleton, Colorado, said this: “The best way for a person to find out if they are covered are to review the coverages with their Agent. It is not the easiest to decipher coverages on their policy because it is written in contractual insurance legalese, so you need someone who knows insurance and can translate your contract into laymen's terms. They should pay attention to any time their policy uses the word exclusion.”
You can pull out your policy and look through it. Read through the exclusions. I mentioned above, look for things like “for hire” or “livery.” But more important, just contact your insurance. Tell them you're looking into doing deliveries and want to know if your coverage will support that.
If it doesn't, stop. Immediately. Drop any scheduled blocks you might have with anyone, don't do another delivery until you are covered.
I'll say it again: It's THAT serious.
If My Policy Doesn't Cover Me on Delivery (and it most likely doesn't) What are My Options?
First and foremost, find out if your current policy has a rider or endorsement that will cover delivery work. Some do. I have seen things here and there that stated that State Farm, All State, USAA and Farmers are some policies that may have add on options. Get the rider. Today. Now. Even if you think another policy may be cheaper once that's done, get it on your current policy today so you are covered.
Did I mention that it's that important?
If they don't have an option, you're going to have to get a different policy. There's no way around it. Shop around. I took out a Geico policy designed for Rideshare, but it has coverage for delivery as well. Check into rideshare policies – but keep in mind that some don't cover delivery. One great resource is put up by the Rideshare Guy, you can start there. Check into the companies I listed. Maybe your best bet is to go to an independent agent. That's how I found Mark Rodgers who I interviewed for this article. I am not a customer of his as I write this and I am not receiving anything for mentioning him, but he was kind enough to take time out of a busy schedule to answer questions, so I wanted to give him a shoutout. I linked his agency above for anyone in Colorado or Arizona (and I believe he can provide coverage in Utah in July).
Do it. NOW!
If you haven't already updated your insurance to something that specifically covers delivery work, do this before you take another delivery. Seriously. I don't know how many times I have to say it's important enough but it's important enough. There is just too much risk to do the kind of driving we have to do without making absolutely sure that you are covered. There's a moral obligation as well – you don't want to be that driver who impacted someone else's life and wasn't insured. Don't be that driver!
I know, it's hard to cough up extra money for insurance.
But let me be really blunt here. If you can't afford the extra for the RIGHT insurance, you definitely can't afford to pay for damages out of your own pocket.
And what that means is, if you can't go out and get the right insurance, you shouldn't be doing this.
I know, that's harsh. But that's part of being part of running a business, and being responsible. There are no guarantees with a business, and maybe that's part of what is just evil about Grubhub, Doordash, Uber Eats and all the others requiring you to be an independent contractor. But that's one of the rules of running a business, that if you can't make a go of it, then don't do it. There are so many other opportunities. Personally, I think you CAN do well when you take control, but part of the deal is making sure you are covered.
So don't be that person who knowingly drives around uninsured.
I know, you may not have known you were until now. But now you know.
Sorry, but not sorry. You need to know because ignorance won't get you out of a huge loss when there's an accident.
So… do the right thing.
Before you do another delivery.
What do you use for insurance?
Please comment below – who do you use? Does your insurance provider have an add on or endorsement that allows you to do delivery? Did you have to go with a commercial or rideshare account? If you have insurance with a particular company that does cover your delivery work, let us know so that others can have ideas who to check with. Thank you.