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Add-On Business Use Insurance for Delivery Drivers

Most drivers who work with delivery apps like Instacart, Uber Eats, or Grubhub sign up without understanding the real requirements for the job. The sign-up pages and contracts just say the driver needs to have a valid driver's license and insurance. After all, if the app-based delivery companies knew the driver had to have special insurance, wouldn't they tell the drivers?

Denver drivers who work for Instacart or Grubhub generally need to purchase separate commercial drivers policies, even if they are only delivering a few hours a week. Many car insurance companies provide supplemental coverage or add-on business use insurance for existing personal auto insurance policies. Without this add-on coverage, drivers may not be covered in the event of an auto accident

Car Insurance Coverage for Delivery App Drivers

Typical car insurance policies DO NOT cover accidents when the driver is doing commercial deliveries. Without knowing this, most delivery app drivers only carry the minimum insurance required. In Colorado, the insurance coverage minimums include: 

  • $25,000 for bodily injury or death to any one person in an accident
  • $50,000 for bodily injury or death to all persons in any one accident
  • $15,000 for property damage in any one accident

Unfortunately, most delivery drivers only find out about the lack of insurance coverage after an accident. When the insurance company finds out the driver was delivering food or groceries with a gig economy company, they will generally deny the claim, leaving the driver personally liable for damages

Some delivery apps provide limited coverage only while delivering (not on the way to or from the delivery). Other delivery apps will not provide any coverage. When delivery apps do offer coverage, it is often excess coverage that applies after the driver has exhausted their personal liability limits. This leaves a lot of delivery drivers high and dry, forced to pay out-of-pocket for any damages. This may also leave the driver's personal property subject to seizure. 

Add-On Policies When Delivering for Grubhub or Instacart 

With delivery driving, gig work, and “side hustles” so common for people these days, more insurance companies are providing add-on coverage to temporarily cover a driver when they are doing deliveries or commercial driving. Each insurance company handles these policies differently and they may not be available in Colorado, so contact your insurance provider to find out what policies they offer. 

For example, GEICO offers a rideshare insurance policy that covers drivers when doing on-demand deliveries or ridesharing. Progressive also offers coverage for on-demand services, including rideshares, food delivery, or grocery deliveries. These types of add-on or hybrid policies may end up costing drivers a few hundred dollars a month. Other companies may require full commercial coverage, which could be prohibitively expensive. 

When delivery drivers do find out about the requirements for commercial coverage, they may decide that gig work isn't very profitable after the additional insurance expenses. Alternatively, drivers may continue to deliver without additional coverage and just hope they never get into an accident. 

Should I Not Tell My Insurance Company I Was Delivering During the Accident?

As a way to get around the commercial insurance requirement, some delivery app drivers just plan to never tell the insurance company they were delivering at the time of the accident. This can have some serious consequences if the driver is ever involved in a serious injury accident. 

Your insurance policy may require disclosure of any commercial or business use of your vehicle, which would include app-based driving for profit. Failure to tell your insurance company may be a misrepresentation and could result in canceled coverage. Lying about your driving could also be considered insurance fraud, which could lead to criminal charges.

Even if you don't admit to delivering during the accident, your car insurance company may still find out. If the accident is serious and there is an injury victim, your insurance company may be more likely to look in-depth at what happened during the accident. Your insurance company could get records of your delivery driving, which could give them a reason to deny your claim. 

Injured in a Delivery Driver Accident in Denver?

If you are injured in an accident involving a delivery app driver, as the delivery driver or driver of another vehicle, you may be left with expensive medical bills and serious pain. The person responsible for the accident should have to pay for the costs of your injuries, including medical treatment, loss of income, and other damages. Our Colorado auto accident attorneys will fight to get the maximum compensation available for your injuries. Contact us today for a free consultation.