Do you need extra auto insurance when delivering food?

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Demand for meal delivery services has soared, especially since the pandemic began so many months ago. In turn, people who may have found themselves suddenly unemployed bgean looking to food delivery apps for extra income.

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Many of these drivers, however, are unknowingly putting themselves at risk because they don’t hold the proper car insurance. 

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Do you need extra auto insurance when delivering food? Back to video

Personal car insurance policies may not cover you if you get into an accident while delivering food because driving for a meal app is considered a commercial activity, which, technically speaking, requires a commercial car insurance policy.

Insurance endorsements that might protect drivers for meal delivery (optional coverages that you can add to your personal policy) aren’t widely available in Canada. Your car insurance company might agree to cover you, but it’s up to their discretion and decided on a case-to-case basis.

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The consequences of not being properly insured can be financially devastating, dealing another blow to drivers who turn to these apps because they’re already in precarious situations.

The trouble with meal delivery insurance

Insurance companies were relatively quick to launch products that accommodate drivers for ride-sharing apps, but they haven’t reacted in the same way to meal delivery services.

Most types of delivery services fall into the realm of commercial insurance, says Elektra Hilton, director of operations at HUB International, an area that personal auto insurance providers “don’t even want to touch.”

When you’re driving for personal use, it’s common to have passengers riding with you, and insurance companies are prepared to insure the risks that this presents. Chauffeuring pizzas, however, is a different story, at least in the industry’s point of view.

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Basically, don’t expect special endorsements for meal delivery drivers to become commonplace any time soon. “It’s a different range of insurance,” Hilton says.

How to avoid policy cancellation

Car insurance companies can outright cancel your personal policy if you file a claim for an accident that was caused while driving for a meal delivery platform.

Drivers must inform their insurance companies that they intend to drive for a meal delivery service before signing up to avoid outright cancellation — and that advice applies even if the app provides commercial insurance coverage.

Having a cancellation on your insurance record can make it hard to find another insurance company willing to provide coverage to you, and if you do, your premiums will be higher. It takes years for a cancellation to be wiped off your record.

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If you’re already driving for an app and want to avoid having this happen to you, Hilton advises following these steps:

If you’re thinking about joining a meal delivery app, contact your insurance company before you sign up and complete any trips. Not notifying your insurance company could land you in big trouble.

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In Ontario, insurance companies aren’t obligated to offer specialty coverages, which means food delivery endorsements are hard to come by. We strongly recommend only signing up with a platform that provides commercial insurance to drivers.

How meal delivery services stack up

At the moment, UberEats and DoorDash appear to be the only meal delivery platforms that provide commercial insurance to drivers at no additional cost. (LowestRates.ca contacted DoorDash and SkipTheDishes for this story but did not receive a response.)

Uber Eats

Insurance offered: A commercial policy for Uber Eats drivers offers the following coverage:

What their website says about car insurance: According to Uber: “Uber maintains commercial auto insurance to help protect you in case of a covered accident while making a delivery on the Uber app.”

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Skip The Dishes

Insurance offered: We weren’t able to find evidence of insurance offerings on its website.

What their website says about car insurance: According to the site , the requirements to be a Skip courier are “a reliable vehicle, a valid driver’s license vehicle insurance, vehicle registration, and a background check.”

DoorDash

Insurance offered: DoorDash will top up drivers’ liability coverage if the damage exceeds the limits in their personal policy (this is what’s known as excess coverage):

What their website says about car insurance: According to DoorDash , “DoorDash does provide excess auto insurance for Dashers, but this policy applies only to damages you cause to other parties and only to accidents while on an active delivery when you are in possession of goods to be delivered. This excess insurance applies only after you go through your own auto insurance policy first. If you fail to maintain your own insurance, DoorDash’s coverage may not apply.”

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