Delivered: How Ridesharing and Food Delivery Impacts Your Car Insurance
Thinking of delivering local pizza for Skip the Dishes or providing a “Lyft” in your car in your spare time? Before starting your delivery business, let’s chat.
It’s no secret that the ridesharing industry has boomed over the last few years. It has changed the way we order takeout and order a ride. With this change in consumer behaviour here to stay, coverage options with insurance providers have become more and more commonplace. Understanding the details of the policy coverage is another story. With so many options for ridesharing coverage in Ontario today, it can be difficult to know which option is the best for you. That’s where a broker comes in handy. First, let’s take a look at this disruptive industry and what coverage includes for the drivers in these evolving policies.
How Does Insurance Work?
Ridesharing insurance for drivers comes into play as soon as they open their respective app and signal that they’re ready to accept a fare. This means that, even while drivers are waiting for a fare (or food delivery) and driving to and from their pickup destinations, they’re covered. This coverage will stay in effect for as long as the vehicle is on the job. Once signed off for the day, the driver’s personal auto insurance policy kicks in to cover their vehicle, so it’s important that every driver has both. For those who are looking for additional protection, there are add-ons available that go above and beyond the standard policy. Your insurance broker can help you make sense of your options.
What’s Covered for Ridesharing Drivers?
Policies may differ slightly from provider to provider. Generally, the most common insurance coverage for ridesharing drivers includes $1 million in third-party liability once they have signed into the app and are waiting for a trip. As soon as a fare is accepted, the liability protection increases to $2 million. Once the passenger exits the vehicle, the coverage returns to $1 million as long as the driver is signed into the app. The policy will also cover the following:
- Ontario Accident Benefits
- $2 million in coverage if the vehicle is damaged by an uninsured/underinsured driver or if the vehicle is involved in a hit-and-run
- Property damage if the vehicle is damaged in a no-fault accident
- Comprehensive coverage and contingent collision that pays for damage to the vehicle (a deductible of $1000 is required)
What About Food Delivery Drivers?
We’ve found that typically to register as a driver for a food delivery company, you need to have sufficient insurance active for your vehicle. However, it is equally important that you are honest with your broker and inform them of the intended use of the vehicle. In 2019, a courier ended up losing thousands of dollars and was denied an insurance payout from a claim after a collision. This all happened because they hadn’t been honest with her provider that they were using the vehicle to make deliveries. Some rideshare companies do provide their own insurance, while others do not, so don’t take the risk of having none.
Who Should You Contact First?
Calling an insurance broker first is always the best route. At Gifford Carr, we have access to all the top insurance providers across Ontario and insights to help ensure you have the best coverage options for your new rideshare/delivery business. Talking with a broker will ensure that you and your vehicle are properly protected. Are you interested in becoming a ridesharing or food delivery driver, and do you want to learn more about what other insurance providers are offering? Gifford Carr Insurance Group is ready to help you find the right protection. Our team of insurance brokers will help guide you through the process and find you the best policy and rates for your type of vehicle and schedule. Contact us today to learn more!