Are you looking for a way to make a few extra bucks? Maybe you want to pay off debt or save for a great spring vacation. One way many people opt to increase their cash flow is through a second job, such as working as a food delivery driver or for a ridesharing service.
While these side gigs are a great way to make extra money, they do come with an added bit of risk. Being on the road more means there’s a greater chance you could be involved in a serious accident. Likewise, your personal insurance coverage might not pay for damages if this happens.
Our team here at Smith Insurance and Financial Services has put together a quick guide. Here are a few things you need to know about car insurance for food delivery, grocery delivery, and rideshare services.
Did You Know You Aren’t Covered with Personal Auto Insurance?
Most people automatically assume that they’re covered under their personal auto policy while working as a food delivery driver or for a ridesharing service. The problem with this is that there’s no coverage if you’re using your own vehicle while engaging in business activity.
This means that if you get into a car accident while on the clock, you could be responsible for paying for all damages out of your own pocket. The reason for this is that there are separate rules for business auto insurance and personal auto insurance. This is why it is so important to talk to your insurance agent ahead of time to make sure you are adequately covered.
Your Employer Might Offer Supplemental Coverage
It might sound scary to think that you’re driving around without insurance, but the truth is that your employer likely offers some sort of supplemental coverage for you to use. Most small restaurants or pizza places have what is called owned and non-owned insurance. This essentially means that you have liability coverage while you’re in the process of delivering for their establishment, but do not have first-party coverage to pay for any damage to your vehicle. Likewise, most major rideshare services like Uber and Lyft offer a small amount of supplemental coverage for the same thing.
Understanding Possible Gaps in Coverage
However, there is a big chance you might find yourself with a gap in coverage. While the supplemental insurance is great to have, it usually only covers you while you’re actively in the middle of a delivery or have a passenger in your backseat. If you’re involved in an accident while waiting for your next fare or between deliveries, you might not be covered. This is why it is important to talk to an agent to determine the best way to handle this type of situation.
How Does Carpooling Work in Terms of Coverage?
What about carpooling? Are you still covered if you give other people rides to work or school? In most cases, carpooling isn’t considered business use. If you know the people you are transporting—such as friends or coworkers or members of your child’s soccer team—then there’s no issue. However, if you plan to exchange money for this type of service or are doing it on a regular basis, it might be a good idea to double-check your coverage with an insurance professional.
Always Talk to Your Local Agent First
The bottom line here is that it is always important to talk to your agent if you’re doing anything out of the ordinary with your car. They will be able to give you the best advice on coverage and help you determine if you need a different type of policy for what your side gig entails. Contact us today to schedule an appointment.