Learn important facts every personal automobile insurance policyholder should know.

Love them or not, food delivery services are a cultural presence in the U.S.  As long as DoorDash, Uber Eats, Grubhub, etc. are profitable, they will be in business. Especially popular in large cities (of which Ohio has three!) and surrounding suburbs, they have a broad customer base and a ready supply of food delivery drivers. But, from the standpoint of the drivers’ best interests, lurks an automobile insurance issue many do not really understand.

Convenience is a commodity that food delivery service companies have successfully monetized. Hooray for innovation!  But, if you are an independent contractor driving for a food delivery service company(ies), pump the brakes. Below are five eye-opening, must-read points that cut through the hype of easy money and prioritize financial security of individual drivers.

1. 1. There is no coverage under the standard Personal Automobile Policy (PAP) for damage (including property damage and/orbodily injury to third parties) that occurs while driving a personal auto for hire of persons or goods. Within the context of this blog, this means no coverage, while the driver is actively delivering food and/or logged in to any food delivery service app(s).

2. Accidents happen. Once you get behind the wheel of a motor vehicle and operate it, you are personally liable for any damage or injury you cause to property or person(s). Driving with no auto liability insurance or with inadequate auto liability insurance limits at any time is a beeline to financial ruin.

Parents beware:
If you or your kid(s) use your car to drive for food delivery service, you risk claim denial, policy cancellation, and/or non-renewalof your personal auto insurance.

3. Some food delivery service companies now provide coverage for drivers in the U.S.  However, what coverage is provided and under what circumstances varies. For example, most of them leave drivers bare or significantly underinsured when not actively involved in food delivery. None of them cover damage to your vehicle.

4. Several personal lines auto insurance companies now offer a special endorsement for an additional premium to address the coverage problem. Beware, as policy and endorsement language are different among personal auto insurance companies. Generally though, whatever PAP special endorsement you purchase will:

• • • • not cover cost of food damaged or undeliverable, while in the driver’s care, custody, or control; and
      • be limited to the liability limit, or a lower limit, than you already have on your PAP; and
      • apply excess of whatever other available insurance coverage there may be.

5.  Food delivery service companies are making money, in large part due to significant cost savings achieved by using independent contractor drivers rather than employee drivers. Another big cost savings to these businesses is a direct cost to you, the drivers, as drivers are responsible for their own automobile maintenance, repair, and fuel.

The obvious consideration for drivers is whether or not the cost/benefit factors are acceptable to them personally.

The big plus of driving for food delivery service companies is the freedom to schedule your own hours, including when to start and quit work. As appealing as this independence may be, understand you are exposing yourself to substantial, personal risk and cost. The common sense solution is don’t drive for any food delivery service business, unless you have purchased a special endorsement to your personal auto insurance policy before there is any possible claim issue.

Richey-Barrett Insurance is a Trusted Choice Independent Insurance Agency that has worked for decades in the personal lines automobile insurance market. We serve customers mainly in Northeast Ohio, but are able to do business all over Ohio.