Car Insurance for Delivery Drivers

Did you know that delivery drivers are in high demand these days? According to Statista, food delivery revenue increased by more than 20% in 2020 compared to 2019. Grocery delivery has also been trending upwards, with more than half of the grocery stores in the U.S. offering home delivery or store pick-up options. As of May 2020, online grocery web searches increased by 202%.

If you are one of the many people who use their car to earn extra cash by delivering groceries, take-out meals, and packages, you must purchase delivery driver insurance for protection on the road. Personal auto insurance does not typically cover drivers using their cars for work and without protection, you could end up owing money for damages if you are in an accident on the job.

In this article, we will explain everything you need to know about car insurance for delivery drivers, including:

• Types of delivery driving and their insurance requirements
• Best delivery driver insurance companies of 2023
• Tips for choosing and saving on delivery driver insurance

By the end of this article, you will have a clear understanding of how to get insured as a delivery driver and avoid any unpleasant surprises in case of an accident.

Types of Delivery Driving and Their Insurance Requirements

Delivery driving is a broad term that can refer to different types of activities that involve using your car for work purposes. Depending on what kind of delivery driving you do, you may need different types of car insurance to cover your liability and damages.

What is delivery driving and business use of a vehicle?

Delivery driving is any activity that involves transporting goods or people from one place to another using your car as part of your job or business. This can include:

• Food delivery, such as working for companies like DoorDash, Uber Eats, and Postmates
• Goods delivery, such as working for companies like Amazon, Instacart, and Shipt
• Passenger rideshare, such as working for companies like Uber, Lyft, and Via

Business use of a vehicle is any use of your car that is related to your work or business, even if it is not directly involved in delivering goods or people. This can include:

• Driving to meet clients or customers
• Driving to different work locations
• Driving to attend work-related events or training

What is the coverage gap between personal and employer auto insurance policies?

Personal auto insurance policies are designed to cover drivers who use their cars for personal use only, such as commuting, running errands, or leisure. They do not cover drivers who use their cars for business use or delivery driving, as these are considered higher-risk activities that expose the driver to more accidents and claims.

Employer auto insurance policies are designed to cover drivers who use their cars for work purposes only, such as delivering goods or people for a company. They do not cover drivers who use their cars for personal use or outside of their work hours.

The problem is that there may be a gap between both insurance policies when you are using your car for both personal and work purposes. For example, you might have coverage through your employer while driving a takeout order to a customer, but not while driving to the restaurant to pick up the order. If you are in a car accident during a gap in coverage, your personal car insurance company could deny coverage, meaning you could be stuck with property damage and medical bills.

Do I need a commercial auto insurance policy or a rideshare endorsement?

To avoid the coverage gap between personal and employer auto insurance policies, you may need to purchase additional car insurance for delivery drivers. There are two main options:

• A commercial auto insurance policy is a type of policy that covers drivers who use their cars for business use or delivery driving. It provides higher liability limits and more comprehensive coverage than personal auto insurance policies. It also covers drivers who use their cars for multiple types of delivery driving or who own multiple vehicles for work purposes.
• A rideshare endorsement is an add-on to your personal auto insurance policy that extends your coverage to include delivery driving or ridesharing activities. It fills in the gap between your personal and employer auto insurance policies and provides coverage for both personal and work use of your car. It is usually cheaper than a commercial auto insurance policy but may have lower liability limits and less coverage options.

The type of car insurance you need depends on several factors, such as:

• The type of delivery driving you do
• The frequency and duration of your delivery driving
• The state where you live and work
• The company you work for and their insurance policy
• The car insurance company you choose and their policy options

The best way to find out what type of car insurance you need is to contact your car insurance company and your employer and ask them about their coverage and requirements. You should also compare quotes from different car insurance companies and see what options they offer for delivery drivers.

Best Delivery Driver Insurance Companies of 2023

If you are looking for car insurance for delivery drivers, you may want to consider some of the top-rated delivery driver insurance providers in the market. We have compiled a list of some of the best delivery driver insurance companies of 2023 based on factors like coverage options, premiums, third-party ratings, areas and industries of coverage, and accessibility.

USAA

USAA is a members-only insurance company and online bank that caters to military families. It offers a rideshare endorsement that can be used for any delivery driving, such as food delivery, goods delivery, and passenger rideshare. The endorsement is available in most states and can be added to your personal USAA auto policy for an additional fee.

USAA is known for its excellent customer service and overall satisfaction. It has the highest overall score in all but one region in the J.D. Power 2022 U.S. Auto Insurance Study. It also has an A++ rating from A.M. Best, indicating superior financial strength.

The main downside of USAA is that it is only available to active duty and retired military service members or family members. If you do not qualify for USAA membership, you will not be able to purchase its delivery driver insurance.

Erie

Erie is a regional insurance company that operates in 12 states and the District of Columbia. It offers a business auto insurance policy that covers drivers who use their cars for delivery driving or other business purposes. The policy provides higher liability limits and more coverage options than personal auto insurance policies. It also covers drivers who use their cars for multiple types of delivery driving or who own multiple vehicles for work purposes.

Erie is known for its competitive pricing and generous features. It has the highest overall score in the Mid-Atlantic region in the J.D. Power 2022 U.S. Auto Insurance Study. It also has an A+ rating from A.M. Best, indicating superior financial strength.

The main downside of Erie is that it is only available in a limited number of states and does not offer a rideshare endorsement option. If you live outside of Erie’s service area or prefer a rideshare endorsement over a business auto insurance policy, you will not be able to purchase its delivery driver insurance.

Progressive

Progressive is one of the largest and most popular insurance companies in the U.S. It offers a commercial auto insurance policy that covers drivers who use their cars for food delivery or other business purposes. The policy provides higher liability limits and more coverage options than personal auto insurance policies. It also covers drivers who use their cars for multiple types of delivery driving or who own multiple vehicles for work purposes.

Progressive is known for its flexible pricing and customization options. It allows drivers to choose their own coverage limits, deductibles, and add-ons. It also offers discounts for bundling policies, paying in full, and having a good driving record. It has an A+ rating from A.M. Best, indicating superior financial strength.

The main downside of Progressive is that it does not offer a rideshare endorsement option and does not cover drivers who use their cars for passenger rideshare. If you prefer a rideshare endorsement over a commercial auto insurance policy or work for a passenger rideshare company, you will not be able to purchase its delivery driver insurance.

Allstate

Allstate is another large and well-known insurance company in the U.S. It offers a rideshare endorsement that can be used for any delivery driving, such as food delivery, goods delivery, and passenger rideshare. The endorsement is available in most states and can be added to your personal Allstate auto policy for an additional fee.

Allstate is known for its extensive coverage options and features. It provides coverage for both personal and work use of your car, as well as gap coverage between your personal and employer auto insurance policies. It also offers benefits like accident forgiveness, safe driving rewards, roadside assistance, and new car replacement. It has an A+ rating from A.M. Best, indicating superior financial strength.

The main downside of Allstate is that it tends to be more expensive than other delivery driver insurance providers. It also has lower customer satisfaction ratings than some of its competitors, according to the J.D. Power 2022 U.S. Auto Insurance Study.

Tips for Choosing and Saving on Delivery Driver Insurance

Now that you have an idea of some of the best delivery driver insurance companies and policies in the market, you may wonder how to choose the best one for your needs and budget. Here are some practical tips to help you find the best delivery driver insurance policy:

• Shop around: Compare quotes from different car insurance companies and see what options they offer for delivery drivers. Look at the coverage limits, deductibles, add-ons, discounts, and customer reviews of each provider and policy.

• Bundle your policies: If you have other types of insurance, such as home or renters insurance, you may be able to save money by bundling them with your delivery driver insurance policy. Many car insurance companies offer discounts for customers who have multiple policies with them.
• Take advantage of discounts: Besides bundling, there may be other discounts you can qualify for, such as safe driver, good student, low mileage, or loyalty discounts. Ask your car insurance company about the discounts they offer and see if you are eligible for any of them.
• Drive safely: One of the best ways to save on delivery driver insurance is to avoid accidents and claims. Driving safely can help you lower your risk of getting into a car accident and keep your premiums low. It can also help you earn rewards or bonuses from some car insurance companies or employers.
• Maintain a good credit score: Your credit score can affect your car insurance rates, as car insurance companies use it as a factor to determine your risk level and reliability. Having a good credit score can help you get lower rates and better terms for your delivery driver insurance policy. To improve your credit score, pay your bills on time, keep your credit card balances low, and check your credit report regularly for errors.
• Review your policy regularly: Your car insurance needs and rates may change over time, depending on your driving habits, vehicle, location, and employer. You should review your delivery driver insurance policy at least once a year and update it if necessary. You should also shop around and compare quotes from different providers to see if you can get a better deal.

Conclusion

Delivery driving can be a rewarding and flexible way to earn extra income, but it also comes with risks and responsibilities. You need to have the right car insurance for delivery drivers to protect yourself and your vehicle in case of an accident.

Depending on the type of delivery driving you do, you may need a commercial auto insurance policy or a rideshare endorsement to cover the gap between your personal and employer auto insurance policies. You should contact your car insurance company and your employer and ask them about their coverage and requirements.

You should also compare quotes from different delivery driver insurance providers and see what options they offer. Some of the best delivery driver insurance companies of 2023 are USAA, Erie, Progressive, and Allstate. They offer different types of policies, coverage options, premiums, and features for delivery drivers.

To choose and save on delivery driver insurance, you should shop around, bundle your policies, take advantage of discounts, drive safely, maintain a good credit score, and review your policy regularly.

If you are a delivery driver or plan to become one, don’t wait any longer. Get insured today and enjoy the peace of mind that comes with having adequate delivery driver insurance coverage.