Are food delivery vehicles covered by personal auto insurance?

Food delivery vehicle insurance must be commercial coverage. The expense of commercial insurance is typically higher than commercial coverage, at $100/mo on average.

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: May 27, 2020

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Here's what you need to know...

  • If you are delivering food in your personal vehicle, then you must purchase commercial coverage for your vehicle
  • Some delivery companies have hired & non-owned auto coverage which covers the cost of damages that you cause to another vehicle in an accident
  • The expense of commercial auto insurance is typically higher than personal coverage

Do you need special insurance to deliver food? If you are delivering food in your personal vehicle, including things like UberEats, Doordash, and Instacart, then you must purchase commercial coverage for your vehicle. That is because your auto insurance will not cover your personal vehicle if you are in an accident while using it for work purposes.

As a delivery driver, it probably hasn’t crossed your mind that you need a specific type of insurance for business use of your personal vehicle.

The company that you are working for isn’t required to provide you with any insurance or any insurance information; they only need to tell you that auto insurance is required.

You will find that there are many people online that will tell you that you don’t need to get special insurance for your vehicle because the insurance company won’t find out. Get into a single accident while on the job and you will quickly find out that this isn’t true.

When the police report is filled out, the police officer will note that you were driving for a delivery. This report will be sent to the company. Once they read that report you are busted and you will find that the insurance company may deny your claim. In fact, in all likelihood, they will deny your claim, and this is something that most delivery drivers can’t afford.

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Why can’t I have personal insurance on my car when I use it for food delivery?

The main reason that you cannot keep personal insurance for your vehicle when you are using it for food delivery is that, when you use your vehicle for work, you drive it much more often.

You may not think that this is a big deal, but the truth is that this frequent driving increases your risk of having an auto accident.

While often a commercial car insurance policy is designed to protect the goods in the vehicle as well as your vehicle and the other vehicles in the accident, as a food delivery driver you are still required to carry this type of insurance.

This is the number one mistake that delivery drivers make.

They think that if they are only delivering food, then they don’t have to worry about more expansive coverage.

Some people believe that as long as they don’t have the logo of the company on their vehicle while they are making their delivery then they are safe.  Again, this isn’t true, if you are delivering pizza, even if you are a contracted (1099) employee, you will still be required to have commercial insurance on your vehicle.

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Why doesn’t my place of employment cover this insurance for me?

There are some companies that do provide commercial coverage for the vehicles that their employees drive. This coverage is called hired & non-owned auto coverage. This is liability coverage that can cover the costs of damages that you cause to another vehicle in an accident.

The reason that some companies carry this coverage is to prevent themselves from being named in a lawsuit should your insurance not cover the damages because you didn’t have the proper insurance.

It is important to understand that there are no laws requiring a business to carry hired & non-owned auto coverage. In addition, this coverage doesn’t cover your personal vehicle, only the vehicle that you have damaged.

Just because your employer has hired and non-owned auto insurance doesn’t mean that you can skip buying commercial insurance on your vehicle. If you don’t have the right kind of insurance, you could find yourself out of a job in addition to losing your vehicle or being unable to pay for your own damages.

How much does commercial car insurance cost?

The expense of commercial auto insurance is typically higher than personal coverage. Some of that expense will be determined by your driving record, what type of vehicle you own and so on.

However, there are some people who have found that their commercial insurance was only slightly more expensive than their personal insurance.

To only way you can find lower cost insurance is by shopping around.

Just like there are quote tools for personal insurance, you will find that there are also free quote tools for commercial insurance. These tools will allow you to shop around for commercial car insurance without having to visit multiple sites. In addition, you can compare your quotes side by side.

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