Insurance Coverage for Food Delivery Drivers versus Rideshare Drivers
If you’re thinking of getting a job as a food delivery driver or a rideshare driver, it’s important to understand that insurance coverage differs depending on the type of driver you are and the company you work with. Both types of drivers will likely need to obtain insurance that allows them to use their personal vehicles for business purposes. In most cases, personal car insurance coverage isn’t enough. While there are many similarities between food delivery drivers and rideshare drivers when it comes to insurance coverage requirements, there are also some notable differences that you should be aware of.
How Delivery Insurance Differs Between Food Delivery Drivers and Rideshare Drivers
When someone is looking to obtain a job as an Uber or Lyft driver who transports passengers from one destination to another, they will likely be required to obtain rideshare insurance to make sure that they have enough coverage to account for any situation they could be involved in. As for food delivery drivers, these individuals will only be transporting food from one destination to the next, which means that the amount of coverage they require may be less when compared to rideshare drivers.
Some businesses will automatically provide a certain amount of coverage for the drivers they hire. If the driver is considered to be a company employee, they will likely be given extensive coverage that takes the place of their personal car insurance when they’re driving a business vehicle. This is particularly common among pizza delivery drivers. However, it’s also possible to work with a company that provides coverage when driving on an active route but doesn’t include coverage for the periods of time after and before the delivery occurs.
Let’s say that you earn a job as a food delivery driver at Domino’s Pizza. In this situation, it’s important to understand that stores are typically locally owned franchises, which means that owners of these franchises will usually purchase some type of commercial car insurance that can cover a driver’s vehicle during normal work hours. An example of this insurance is non-owner car liability insurance. However, the exact amount of coverage you obtain largely depends on the franchise that you work with. Some owners may not purchase enough coverage, which means that you could be tasked with buying your own insurance.
Another food delivery platform is GrubHub. While GrubHub requires drivers to have car insurance, they don’t provide commercial auto insurance. On the other hand, Postmates and Uber Eats both provide drivers with a certain amount of coverage that might prove to be enough. While postmates requires drivers to have their own insurance, they also offer an auto insurance policy that provides as much as $1 million in additional coverage for each accident. Keep in mind that this insurance only takes effect after the driver’s own coverage has been exhausted.
Uber Eats provides drivers with commercial auto insurance with as much as $1 million in liability coverage. Comprehensive and collision coverage are also available if the driver agrees to pay a $1,000 deductible.
How Rideshare Insurance Works
If you decide to work as a rideshare driver, you will likely need to obtain rideshare insurance, which is offered by many auto insurance providers. In fact, California requires drivers who work for companies like Uber and Lyft to obtain rideshare insurance. Both Uber and Lyft provide drivers with rideshare insurance. If you have an accident when a passenger is in your vehicle or you’re driving to pick a passenger up, the policy provided by Uber and Lyft will cover you.
However, both of these companies expect drivers to purchase their own comprehensive, liability, and collision insurance. Keep in mind that these rideshare companies include an app that you will use as you pick passengers up and drop them off. These apps are divided into three separate phases, which include:
- Phase one – During this phase, you alert the rideshare company that you can provide service.
- Phase two – During this phase, you’ll accept a specific assignment, after which you will drive to the location of the pickup.
- Phase three – This phase involves picking passengers up and dropping them off to the secondary location.
During phase one, the Uber or Lyft insurance policy won’t provide any coverage. In the event that you’re involved in an accident during phase two, you should receive coverage whether you or the other driver is at fault for the accident. However, your standing with Uber/Lyft could worsen if you are the cause of the accident. As for phase three, the available coverage extends to the passenger as well as the driver. However, the amount of coverage you receive depends on the phase that you’re in and the company you work for.
The insurance policies that Uber and Lyft provide are considered to be rideshare policies. However, you may need additional insurance for phase one of the rideshare process. During phase two of the rideshare process, you will have access to:
- $100,000 for bodily injury for each accident
- $50,000 for bodily injury for every person
- $25,000 per accident in property damages
As for phase three, the coverage differs slightly between Uber and Lyft. Uber coverage includes:
- $1,000,000 of third-party liability coverage
- Under-insured and uninsured motorist bodily injury
- Comprehensive and collision coverage contingent on a $1,000 deductible
Lyft, on the other hand, provides:
- $1,000,000 of third-party liability coverage
- Under-insured and uninsured motorist bodily injury
- Collision and comprehensive coverage contingent on a $2,500 deductible
When to Consider Obtaining Rideshare Car Insurance Coverage
While rideshare insurance is a necessity for Uber and Lyft drivers who want to operate out of California, this insurance is also recommended for food delivery drivers who are working with Uber Eats, DoorDash, GrubHub, and Postmates. If you work for a food delivery company that doesn’t provide their own insurance or provides inadequate insurance, rideshare insurance can provide you with enough coverage to avoid paying out-of-pocket costs in the event of an accident.
How to React After Being Involved in an Accident
If you’re in an accident while delivering food or picking up a passenger for Uber/Lyft, the very first thing you should do is call the police. Medical assistance is also essential if you or someone else in the accident was injured. The documentation that’s created from your treatment will be key towards making sure that you get the compensation you deserve when filing an insurance claim or lawsuit.
Once the police have arrived at the scene of the accident and have created a report, your next step should be to contact your private insurance company and the rideshare company, which will allow you to report the accident. Both Uber and Lyft provide online forms that you can fill out if you would rather report an accident online as opposed to doing so by phone.
The third and likely most important step that should occur after you are involved in an accident is to contact a personal injury attorney. You should have legal assistance by your side to make sure that the insurance provider offers a fair settlement for your insurance claim. It’s possible that the settlement offer will be too low for the injuries you’ve sustained, which is when it may be time to file a lawsuit.
Seek Assistance From a Personal Injury Attorney
No matter the extent of your injuries, it’s highly recommended that you call our personal injury attorney to obtain the representation you deserve. We can help you understand what the legal process entails while also building a strong case. The legal process will involve a comprehensive accident investigation to gather as much evidence as possible that indicates the other driver was at fault.
In the event that the driver who was at fault for the accident was working for a rideshare company, we have the expertise and knowledge necessary to stand up to the lawyers hired by Uber or Lyft if the case goes to trial. Keep in mind that our lawyers will handle all of the necessary documentation for you, which should ease your stress as you’re healing. Call JT Legal Group today to schedule your first consultation.
