If you deliver food with gigs like Uber Eats, Doordash, or Domino’s Pizza you need to protect yourself with food delivery car insurance. As the gig economy grows, more and more people are turning to food delivery platforms as a way to earn extra income. While food delivery can be lucrative, it also comes with risks, especially when it comes to auto insurance coverage.
When you use your personal vehicle for commercial purposes like food delivery, most standard personal auto insurance policies will not fully protect you. There are special considerations, coverages, and laws related to food delivery insurance that drivers need to understand, so they have adequate protection on the road. This article will break down everything you need to know, including a deep dive into important food delivery auto insurance regulations in Texas, California, and Florida.
Standard personal auto insurance is designed to cover occasional, non-commercial use of your vehicle. Because you use your car extensively to earn an income when doing food delivery, most personal policies exclude that use or don’t cover accidents that happen while commercially delivering food.
Here are some key reasons why food delivery requires specialized auto insurance:
Failure to disclose food delivery use or to secure proper coverage can easily leave drivers uninsured and on the hook for hefty out-of-pocket expenses if an accident occurs while working.
To make sure they’re protected, food delivery drivers need commercial auto policies designed specifically to cover the risks that come with transporting goods for income. Here are key coverage types to consider:
In the insurance world, transporting people or goods for money is known as “livery.” For food delivery drivers, a livery policy that explicitly covers transporting food by vehicle is essential. This type of commercial policy is priced to account for the increased use and risk.
Livery insurance covers collisions and damages (to both your vehicle and others) that happen while food items are actively being delivered. Without disclosure of delivery use, your personal insurer might refuse a claim. Livery coverage also tends to come with higher liability limits in case a delivery accident causes property damage or injuries.
Some insurers may offer an all-encompassing commercial auto insurance policy designed specifically for food delivery drivers instead of an add-on livery policy. Standalone commercial policies can be more expensive but may also cover more risks involved with making food deliveries like having logos or toppers on your vehicle to identify you as a delivery driver.
In addition to liability and collision coverage, delivery drivers may want to consider gap coverage to protect themselves in case their vehicle is totaled. Gap insurance covers the difference between what your auto policy pays for a total loss and what you still owe on auto loan financing. This can save drivers thousands since food delivery vehicles depreciate in value faster.
Umbrella or excess liability insurance provides another layer of protection in case of a severe accident while delivering food items that result in major property damage or injuries. It kicks in after you reach the limit of underlying liability coverage provided by your auto policy. For a relatively small annual premium compared to increased liability limits, umbrella coverage brings essential peace of mind.
Some insurers now offer insurance tailored to on-demand and delivery drivers that covers all three major risks: third-party liability, collision, and comprehensive. Policies are priced based on variables like location and annual mileage. Coverage can be turned “on” when logged into delivery apps and “off” when not working. However, getting quotes and securing coverage must happen in advance, so it’s not something you can purchase only in moments when making deliveries.
This coverage protects you if you cause an accident that injures another driver or damages their vehicle or property. Most experts recommend a bare minimum of $100,000 per person and $300,000 per accident in bodily injury liability coverage. However, given the risks of delivery driving, consider opting for $250,000 or even $500,000 per person and accident. Property damage liability of at least $100,000 is also essential. Without adequate liability limits, you put your assets at risk if you cause an expensive accident.
Unfortunately, around 13% of drivers lack insurance. This coverage protects you if an uninsured or underinsured driver hits your car. Match your uninsured/underinsured motorist bodily injury limits to your liability coverage limits for maximum protection.
While not legally required, having comprehensive and collision coverage is wise to repair or replace your car if it’s damaged in an accident or from other hazards like theft or vandalism. However, the coverage does add expense, so raise your deductibles to $500 or $1,000 to reduce premiums.
Med pay covers injuries to you or your passengers from an accident, regardless of who caused it. While optional, it can be worth adding $5,000 or higher in medical pay coverage to help pay copays, deductibles, or other medical bills not handled by your health insurance.
Notify your insurer that you drive for a delivery app, as this usage may not be covered under a standard personal auto policy. Also, discuss any company requirements with your provider. For example, some food delivery platforms require $1 million liability limits and recommend maintaining a $1,000 deductible or less on comprehensive/collision to remain an active driver.
Review all options to find an affordable policy tailored to your specific delivery driving risks and needs. Paying for ample coverage now can save you from devastating financial impacts later if your vehicle is damaged or you cause a serious accident while delivering food orders.
Of all the major national insurers, Progressive offers the most affordable car insurance for food delivery drivers overall. They have a commercial policy with broad coverage options priced for drivers who deliver food, groceries, or other goods. Plus, they offer many money-saving discounts like multi-policy, multi-car, and safe driver discounts. With all discounts factored in, Progressive usually comes out to be the cheapest provider for food delivery drivers.
Geico is better known for rideshare insurance, but they provide competitive rates for food delivery services too. While they may not always beat Progressive on overall value, Geico’s pricing gets close. They also have a commercial insurance product designed for delivery drivers. Plus, Geico allows you to get quotes based on actual annual mileage, meaning you could pay next to nothing for car insurance if you drive very few miles every year.
State Farm is America’s largest auto and home insurer, which means they have the resources to provide affordable coverage options. Though not always the absolute lowest, State Farm car insurance prices are quite economical for food delivery workers. Importantly, if you already have other policies with State Farm, you can save a lot on multi-policy discounts.
The remaining major insurance companies can still offer affordable rates, but likely won’t be quite as cheap as the previous three for food delivery drivers. Still, it’s wise to get quotes from:
Just like personal auto insurance, rates and costs for livery and commercial policies depend heavily on variables tied to risk, such as:
In addition to the specialized coverage considerations mentioned already, food delivery drivers also must comply with regulations that vary significantly between states. Understanding your obligations based on local laws is crucial to avoiding legal jeopardy. Here are delivery driver car insurance requirements in three of the largest states: California, Texas, and Florida.
Texas classifies vehicles used for food delivery services under “personal vehicle for hire” status using Transportation Network Company (TNC) regulations. These rules passed in 2017 define TNCs specifically to cover ridesharing companies, though increasingly apply to delivery platforms as well. Key Texas insurance requirements per TNC law include:
California laws related to food delivery services fall under TNC service (just like rideshare), which sets these auto insurance requirements per SB 784 that took effect in 2020:
Unlike Texas, uninsured/underinsured motorist coverage is required in California. So if a delivery driver sustains injuries or vehicle damage caused by a motorist with no or insufficient insurance, they can still pursue a claim to cover damages up to policy limits they carry.
Florida laws specifically addressing insurance requirements for food delivery services primarily center on pizza delivery. However, regulations are expanding to encompass broader food delivery offered through digital marketplace apps and services. Key auto insurance requirements include:
Driving for food delivery platforms promises fast cash and independence. But it also comes with real risk, from parking lot slips to high-speed collisions. Failing to secure adequate insurance tailored to the exposures and liabilities of making food deliveries can have devastating consequences for drivers left footing the bill in case of an incident.
Protect yourself, your vehicle, and your income by understanding state laws, evaluating risks, and shopping specialized commercial policies suitable for food delivery drivers. Paying a little more per month brings peace of mind and could spare you crippling out-of-pocket costs down the road.
Get your custom food delivery car insurance quote and save hundreds. To start, enter your zip code and fill out a free online application in about five minutes, and compare rates from national and regional insurers. Save more today on the gig car insurance you need.