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The Hidden Danger of Using Your Vehicle as a Delivery Driver

The Hidden Danger of Using Your Vehicle as a Delivery Driver

Many people nowadays use Apps like Uber, Lyft, Shipt, Grubhub, DoorDash, etc.  As more and more people use those Apps to get rides, or to have their groceries or food delivered, more and more people have signed up to drive for those companies.  What most people signing up to drive for these companies don’t know or realize is that there is a hidden danger which may be lurking out there. 

Generally, when a driver signs up to drive for one of these App companies they believe or assume that they are insured in case they are involved in an accident while driving.  While most, if not all, of these companies have a policy of insurance which may provide coverage to third parties, i.e. passengers or person’s injured by the driver’s negligence, most of those policies, issued to the App companies don’t protect the driver or the driver’s vehicle in case of an accident.

For example, the policies issued often don’t provide collision coverage.  If you are driving for one of these companies in bad weather and get involved in a collision the App’s policy may not provide coverage to repair the property damage to your vehicle.  More importantly, your personal insurance company, may contain an exclusion that doesn’t provide coverage for your vehicle while you are using your vehicle to make deliveries or carry passengers for a fee. 

For example, some Nationwide polices provide the following coverage exclusion:

            We will not pay for loss:

7.   To any motor vehicle while used:

a)   to carry a person or property for a fee or compensation; or

b)   on a regular basis for retail or wholesale delivery, including but not limited to pizza, magazine, newspaper and mail delivery.

Under this type of exclusion, the college student or person trying to earn a few extra bucks delivering papers, driving for Dominos, or working for any of the App companies is likely to find that they are left without collision insurance coverage in the event of an accident. 

The driver’s personal insurance policy is likewise likely going to contain a similar, if not the exact same exclusionary language, related to First Party benefits such as medical payment, income continuation or death benefits.  Again, not only will these types of coverage be excluded under the driver’s personal policy, but the App’s insurance policy likely does not provide for this type of coverage. 

Accordingly, someone trying to earn some extra money performing any one of these driving jobs, could actually end up in substantial debt.  For example, a person using their newly financed vehicle runs off the road during a snowstorm, hits a tree and totals their vehicle.  They now find that the App’s coverage doesn’t provide coverage, coverage under their personal policy is excluded, they no longer have a vehicle to drive, but still have to continue paying on the loan until the loan is paid off!

I suspect most people driving for these companies have no idea this potential liability exists.  The App company isn’t going to explain this to the potential driver in terms they understand, although it is going to be buried somewhere in the driver agreement in terms the driver most likely doesn’t understand.  Likewise, most people don’t review their insurance coverage to determine if such an exclusion applies before agreeing to drive for one of these companies. 

If you or someone you know is driver for one of these types of companies, or is considering driving for one of these companies, I urge them to review their insurance policy to see if they are covered.  If they are not sure, call your insurance agent and ask them if any such exclusion applies if you drive for these types of companies.  If your insurance excludes coverage, ask your agent if you can pay extra for a Ryder to your insurance policy to cover you in the event that you are driving for one of these types of companies.  Finally, if your insurance won’t provide coverage, shop arounds and find a company that will.

Persons who are trying to earn some money driving for these types of companies need to be proactive in determining if they have the right insurance coverage.  After your involved in a crash and your car has been damaged is not the time to find out you don’t have the right insurance coverage. 

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