Does your auto insurance cover your delivery line?

Delivery drivers will need to make sure their personal auto insurance has this feature to avoid gaps in coverage in the event of an accident. (iStock)

Delivery services are a growing way to earn extra cash in your spare time by delivering meals, groceries, merchandise, and passengers. And its popularity has jumped since the start of the pandemic.

But before you make your next delivery with your own car, it’s essential to have affordable auto insurance coverage that covers delivery gigs. Your personal automobile insurance policy may not cover all incidents during a delivery.

While most delivery driver jobs provide drivers with some insurance coverage, it may also be necessary to purchase special carpooling coverage or a commercial auto insurance policy.

Delivery drivers who wish to explore their auto insurance options can visit Credible to see what is available to them.


The auto insurance gap

Most app-based transportation network companies provide drivers with free coverage for personal injury and property damage if an incident occurs during a delivery gig.

However, these apps also require drivers to purchase a personal auto insurance policy for their delivery vehicles. The minimum state-required liability coverage and current car registration are required, and you can also choose full auto insurance if you have a newer vehicle or a loan repayment.

Where you are in the delivery process when an accident occurs determines which party you file an insurance claim with. Having inadequate auto insurance can lead to an auto loss coverage gap resulting in significant out-of-pocket expenses.

For example, you might be able to file a complaint when you are actively delivering an order from the restaurant to the customer, but not while on your way to the pickup site.

Drivers may also have to pay a cash deductible before the delivery service starts paying for damage to your car.

Your auto insurance company probably covers incidents when you only use your car for personal use. Incidents that occur while using your personal vehicle for app or employer based delivery services may not be eligible.

There are two situations in which drivers may not need to purchase additional coverage:

  • Temporary use of a personal vehicle for employer deliveries
  • Delivery with a vehicle belonging to the employer

But if you work part-time for a dedicated delivery app, a standard auto insurance policy won’t provide full coverage when you use your car for business purposes.

If you are looking for new auto insurance, you can visit Credible to compare different auto insurance companies and shop around for their plans.


What delivery drivers need to know

Delivery drivers will need to add carpooling gap coverage to their personal auto insurance to avoid coverage gaps and have more coverage when the employer’s auto insurance service does not cover the full amount of the claim. .

Adding this policy increases the monthly premium, but the increase can be as low as $ 5 per month. The declarations page lists the coverage limits for the various stages of the delivery process.

This additional coverage is not necessary when using an employer-owned vehicle. However, most delivery gigs require the use of a personal vehicle.

Depending on the auto insurance provider, the driver may need to purchase commercial auto insurance. This coverage only covers the use of your car for business purposes, not for personal use.

It is also important for drivers to review the delivery service’s auto coverage policy to find out what is covered. Knowing about potential gaps can also facilitate compare auto insurance rates.

The delivery partner can only cover incidents during these phases:

  1. Phase 1: Awaiting acceptance of a withdrawal when you are connected to the application
  2. Phase 2: Driving to the place of care after acceptance of a mission
  3. Phase 3: Driving with the control or the passenger in your vehicle

The delivery service is less likely to cover incidents that occurred during the first phase. Additionally, the app will not cover incidents when drivers are not logged into the app or are not actively working.

Personal carpooling insurance extends car coverage to all phases of delivery to avoid gaps.

What small business owners should know

Business owners who have employees who make deliveries in personal vehicles may be financially liable for an auto insurance claim. Standard commercial auto insurance for company vehicles may not cover these expenses.

Many insurance companies offer a non-owner insurance policy to cover incidents involving personal vehicles. If you are a business owner and this sounds good to you, you can explore the prices and find the right car insurance plan that suits your needs on Credible.


Final thoughts

It can be easy for delivery drivers to believe that the delivery service provides comprehensive auto coverage for injuries and damage sustained while driving professionally. Unfortunately, gaps in coverage may be more common than many realize.

Reviewing auto insurance policies for businesses and individuals can avoid an unexpected lapse of coverage.

It doesn’t take long to compare auto insurance deals and with Credible’s partners you can eliminate the time consuming part of your search. Check out Credible to explore your options and find the plan that’s right for you.


Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.

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