In college I was a pizza delivery driver in the small town of Meadville, Pennsylvania. The hilly, brick streets with uneven pavement made for a less than ideal driving environment. I worked for a regional pizza chain called Vocelli’s. Before going out on deliveries, they asked us to put the triangular “Vocelli’s Pizza” sign on the roof of our car while out making deliveries. I did this for a while; until one day another driver told me that it could be jeopardizing my insurance coverage. To my shock, I investigated and found out he was right.
Most, if not all, auto insurance policies contain language that prohibits coverage if the insured is using the vehicle for a “commercial purpose.” Getting paid to make pizza deliveries certainly falls into that category. Had I caused an accident, I would have had to pay the property damage myself as Vocelli’s did not have an insurance policy for their drivers. No beuno for a poor college student.
Any driver working for Lift, Uber, InstaCart, etc. must carefully know what impact this will have on their insurance. Those that drive for these companies should be aware that their own auto insurance policy will not cover them while they are on the clock getting paid by an app.
While most of these companies have commercial policies that cover bodily injuries caused by their drivers, they are typically only in place while the driver is on the clock. These commercial policies are a bad choice to rely on due to their higher than normal property damage deductibles.
Total your car while driving for Uber? According to Uber’s website, you could be looking at a deductible up to $2,500 if you must make a claim through their insurance.
Uber maintains two different auto insurance policies for their drivers, depending on the status of what the driver is doing. If the driver is available or waiting for a ride request, and if the driver’s personal auto insurance doesn’t apply, there is $50,000 in bodily injury coverage available.
The larger coverage kicks in once the driver is en route to pick up riders and during trips. They have $1,000,000 in third party liability coverage for bodily injury damages caused by their drivers. Uninsured/underinsured coverage and contingent property damage coverage up to the actual cash value of the car with a $2,500 deductible.
Some gig delivery apps do not cover their vehicle at all. I recently had a case involving a delivery company I had never heard of. Spark Delivery is a gig delivery app that is affiliated with, but not owned by, Wal-Mart. According to their website, to drive for them, you must send proof that you have valid auto insurance. I think this may create some confusion with their drivers as to whether they are covered.
Spark Delivery does not cover their drivers. They have no supplemental commercial policy. Drivers that choose to work for them are presented with two options: 1.) purchasing their own supplemental auto insurance coverage (which can get pricey, most estimates around $200 per month); or 2.) lying to their auto insurance and saying they weren’t using the vehicle for commercial purposes if an accident happens.
While neither of these are great options, the second is especially bad, as that is insurance fraud. I do not pretend to know how often this happens, but from many conversations with insurance company adjusters over the years, I know that it happens enough to be a real problem for insurance companies.
If you choose to drive for one of these companies, do your research on 1.) if there is a commercial policy that covers your vehicle when actively on a gig, 2.) what the property damage deductible is for that policy.
For those that are in an accident with a driver working for one of these companies, find out if the driver was actively working at the time of the accident. For uncooperative defendants, this is something that may only come out during discovery after the suit is filed.
Uber pays drivers to get riders to their destination but does not cover their drivers when they are driving back home or waiting to accept a new gig, for example. You’ll need to dig in to clarify what exactly they were doing when the accident occurred. Depending on that answer, you will make a claim with either the commercial policy or that driver’s auto insurance.
If there is no commercial policy and the driver’s auto insurance denies the claim because driver using vehicle for commercial purposes, a Missouri car accident victim is best making an uninsured motorist claim with their own insurance. This could mean, unfortunately, bearing the cost of their own property damage deductible.
