Does car insurance cover food delivery vehicles?

To work as a food delivery driver, you’ll need delivery driver insurance, especially if you’re using your personal car. Your own auto insurance isn’t enough to cover damages if you get into an accident while on the job.

Unfortunately, food delivery companies do not offer car insurance for delivery drivers. Whether it’s a side hustle or a full-time gig, you’ll have to get the right insurance before you start delivering food.

Does personal car insurance cover food delivery vehicles?

Personal auto insurance policies do not cover you when you’re driving for work, so you need a plan that will. Food delivery companies such as GrubHub, DoorDash, and UberEats require their drivers to have a commercial car insurance plan. 

In general, commercial auto insurance can cover:

• Injuries to other drivers or pedestrians
• Your own injuries
• Property damage
• Towing
• Rental reimbursement
• Uninsured/underinsured motorist coverage

Every insurer might define commercial insurance differently, so make sure you check the details.

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Does a commercial auto insurance policy cover personal use?

You typically won’t need a separate personal auto insurance policy if you have a commercial policy. However, check with your insurer to confirm you have coverage for all situations. A commercial auto policy isn’t as standard as liability coverage, so insurers might call it by a different name.

Why do I need a commercial car insurance plan?

Anyone who uses a car for business must have a commercial insurance plan. It protects you, your vehicle, other drivers, and the food delivery business while you’re on the clock.

Food delivery companies require that all drivers have this type of car insurance, so the company isn’t sued after an accident. Otherwise, if you were at fault for an accident while on the job and your insurance couldn’t cover the victim’s damages, the victim could file a lawsuit against the delivery company.

For this reason, the liability limits are much higher for a commercial policy than a personal auto policy. With a personal auto policy, the limit could be around $100,000, but for a commercial policy, it’s usually $1 million.

How much does delivery driver insurance cost?

The cost of a commercial auto policy depends on a number of things, such as the type of delivery and whether or not you use the vehicle for personal use. See the following chart for various situations and average delivery driver insurance rates.

Delivery Type	Policy Type	Average Monthly Car Insurance Rates
None	Personal Use Only	$106
Catering	Business Use Only	$217
Catering	Business and Personal Use	$237
Food Delivery	Business Use Only	$273
Food Delivery	Business and Personal Use	$297
Food Truck	Business Use Only	$434
Food Truck	Business and Personal Use	$767

Your insurance rates will increase if you work in a bigger city. For example, cities have more congested traffic, greatly increasing your risk of getting into an accident. So, compare delivery driver insurance quotes from at least three different companies in your city to find the most affordable rates. 

Auto insurance is much higher for delivery drivers because it’s risky to always be on the road. According to the U.S. Bureau of Labor Statistics, 48.3% of fatalities in the food and beverage service industry were a result of car accidents. In response, delivery insurance rates have spiked.

Read more: Food Truck Car Insurance: Compare Rates, Discounts, & Requirements [2023]

How do I save money on delivery driver insurance?

To save money, start by finding an insurance company that can add on to your personal policy. Companies that have special policies for food delivery drivers offer the best rates. If they offer rideshare insurance, check to see if that applies to food delivery, as with State Farm.

Having a clean driving record is the best way to reduce your rates, but you can get stack multiple car insurance discounts, such as the following:

• Bundle discounts. Purchasing different policies under one company can save you money.
• Paid-in-full discounts. Instead of paying monthly, you can pay your annual rates up front and save a little money.
• Autopay discounts. Insurers prefer autopay, so they offer discounts.
• Safety discounts. If you have safety features installed in your car, you could get a discount.
• Student discounts. If you’re doing food delivery while you’re in school, good grades can save you money on your car insurance.

When you’re ready to start shopping for insurance, make sure you ask about any discounts you’re eligible for.

You could also opt to use usage-based car insurance programs for commercial coverage where available. You would be charged based on your mileage and driving style. 

For example, if you drive safely and only deliver food part-time, this might save you money in the long run. However, if you drive a lot of miles and use food delivery as a main source of income, usage-based car insurance could be quite expensive.

What companies offer delivery driver insurance?

Nearly all major auto insurance companies offer some form of commercial auto insurance. However, some companies, including Allstate, Farmers, Liberty Mutual, and Nationwide, provide specialized insurance designed for food delivery drivers.

For example, State Farm doesn’t require food delivery drivers to purchase additional coverage so long as they have rideshare coverage. Their rideshare coverage extends to food delivery services.

Geico takes it a step further and offers comprehensive coverage to protect customers whether or not they’re on the job. If you already have a comprehensive plan with Geico, you may have sufficient delivery insurance already.

Although USAA provides some of the most affordable coverage options for military members and their families, this company does not currently offer delivery driver insurance.

Do delivery companies provide commercial insurance for workers?

In short, delivery companies don’t provide the coverage you need.

Some companies provide excess insurance that just covers third-party liability damages. DoorDash, for example, gives its drivers $1,000,000 in liability coverage. However, coverage doesn’t kick in until you first reach the limits on your own commercial policy.

Sometimes, if you work for a local restaurant, you might use your car or a vehicle designated for catering or delivery. In this situation, your boss may purchase non-owner insurance to protect the company from lawsuits. 

This type of insurance does not act as a replacement for a commercial policy, nor does it cover your own vehicle. If you’re using your personal car, make sure you get supplemental coverage.

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Exploring Case Studies: Car Insurance Coverage for Food Delivery Vehicles

Case Study 1: Commercial Auto Insurance

John works as a food delivery driver for a popular online platform. He uses his personal car to make deliveries. One evening, while on a delivery, John gets into a collision with another vehicle, causing damage to both cars. Since John has a commercial auto insurance policy specifically designed for food delivery drivers, his insurance company covers the repair costs for both vehicles.

John’s policy also includes liability coverage, so his insurance company handles any third-party property damage or bodily injury claims resulting from the accident.

Case Study 2: Personal Auto Insurance with Business Use Add-On

Sarah runs her own food delivery business and uses her personal car for deliveries. She has a personal auto insurance policy with a business use add-on. One day, while making a delivery, Sarah accidentally damages a customer’s property.

Since Sarah has the business use add-on on her personal policy, her insurance company covers the property damage, subject to the policy’s limits. Sarah is relieved that her insurance protects her business assets and helps her reimburse the customer for the damages caused.

Case Study 3: Rideshare Insurance with Food Delivery Coverage

Mike is a part-time food delivery driver and also occasionally drives for a rideshare platform. He has a rideshare insurance policy that includes coverage for food delivery. One rainy night, while delivering food, Mike loses control of his vehicle and crashes into a lamppost, causing significant damage to his car.

Thanks to his rideshare insurance policy, his insurance company covers the cost of repairing his vehicle, as well as any liability claims resulting from the accident. Mike appreciates the convenience of having a single insurance policy that covers both his rideshare and food delivery activities.

Insurance for Food Delivery Drivers: The Bottom Line

No matter what car you use, your personal auto insurance policy is not enough to cover you while you’re on the job. You’ll need a commercial policy with higher limits and business protection. Otherwise, if you get into an accident while on delivery, you could find yourself out of a job and stuck with major bills.

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