Driving for extra cash? Check your car insurance first.

By Jim Kreidler

Consumer Education Specialist, FTC

August 21, 2020

With more people seeking delivery services during the Coronavirus pandemic, many companies are looking for drivers to shuttle meals, medicine, groceries, and other items to people at home. Before you think about making some extra cash as a delivery driver using your own vehicle, you need to be aware of the insurance pitfalls.

You might think the company you work for will cover the costs of an accident while you’re on duty. Right? Wrong. If you’re in an accident while making (or returning from) a delivery in your own car, you may be personally on the hook for the car repairs and medical bills — both for yourself and anybody else involved in the accident. Many delivery companies, ride sharing services, and restaurants don’t cover those costs.

You might also think your car insurance covers you. Right? Wrong again. Most auto insurance policies do not cover the business use of your own personal vehicle. That means you might have to pay for medical care and car repairs out of your own pocket.

Before you become a delivery employee or gig worker, here are some things to consider:

• Ask the delivery company or restaurant if they have insurance that covers you. Get a copy of the policy. Some delivery companies give you no coverage. Others might pay for your personal insurance deductible or claims over a certain amount. Or, they may cover only damages caused while you’re on the way to make a delivery, but not while you’re coming back or waiting for your next delivery.

• Ask your auto insurance company if your policy covers driving for work. Some insurance companies are responding to the Coronavirus pandemic by extending coverage to customers who are using their personal vehicles to make deliveries.

• If your personal auto insurance policy doesn’t cover business use, you may need a commercial auto policy. Commercial policies cover business uses, like delivering food, packages, or driving for a rideshare company.

Earning money is hard enough. You don’t want a surprise accident to cost you money while you’re hustling to make it.