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What food delivery, rideshare drivers need to know

By HUB SmartCoverage Team on May 6th, 2024

Trying to make a little extra cash on the side in tough times?

If you’ve opted to be a food delivery or rideshare driver make sure your insurer knows. Because you are using your vehicle for both business and personal reasons, your insurance must reflect this.

When applying for your personal auto insurance, you were asked if you used your vehicle for those purposes. If you contacted your broker for a change of address or had questions about your coverage, you were asked again. You must answer truthfully.

No matter what food delivery company you work for, car insurance is required to do your job. Uber Eats appears to be the only major food delivery app in Canada that provides commercial insurance for its drivers while making a delivery on the Uber app.

Depending on which province in which you live, and whether you’re waiting for a request or out on a delivery, you’ll get coverage on the clock. In most provinces with private car insurance systems, Uber provides $2 million in third-party liability coverage, $2 million in uninsured/underinsured motorist protection, actual cash value coverage for collision and comprehensive, and statutory accident benefits.

Uber Eats drivers in British Columbia, Saskatchewan and Manitoba aren’t afforded any commercial car insurance coverage. Instead, they’re advised their public car insurance policies likely include coverage for a limited amount of commercial use (i.e. in B.C. it’s six days a month).

Insurers aren’t consistent about permitting policyholders to work as delivery or rideshare drivers using personal vehicle coverage. Many don’t allow the practice, but some do with no additional premium, provided the insurer is told and the customer has a good driving record. Fewer allow food deliveries.

Ridesharing services

If you drive for Uber or Lyft ridesharing platforms, you still must let your personal auto insurance provider know you’re driving for them in your spare time. Not doing so could invalidate the policy.

While Lyft and Uber provide commercial insurance that covers you while you’re providing the service, you’re still required to have your own insurance when using your vehicle for personal reasons.

In Ontario and Alberta, for example, this is important because even though Uber’s commercial insurance policy has been approved by the provinces, your personal insurer is not required to insure ridesharing vehicles and may cancel your policy or not renew it if you’re driving for Uber on the side.

“You remain responsible for maintaining your personal auto insurance to provide coverage when you are using your vehicle for personal use,” reads Uber’s website.

Basically, ridesharing companies like Uber or Lyft provide insurance coverage when you’re on the clock. Uber provides $2 million of liability coverage and the same amount for uninsured or underinsured motorist coverage. It also has contingent collision and comprehensive coverage for drivers, but only if the driver took it upon themselves to the coverage on their personal auto policy.

In Ontario, Uber has commercial auto insurance for its drivers when they’re on the clock but haven’t accepted a trip. View Uber’s insurance policy details for different provinces here. Lyft offers similar coverage for its drivers.

RELATED READING: Uber Insurance FAQs in Ontario

Just because you drive for a ridesharing company doesn’t mean your personal premium will go up. Your premium will depend on such factors as your age, home address, type of car you drive and your driving record. Work with your insurance broker to get the most competitive quote.

There appears to be confusion among some drivers because rideshare and delivery platform signup websites indicate the company has its own insurance. New hires might believe they’re covered but will quickly learn that coverage is limited if there’s an accident. And bigger issues arise if claims are made against a client’s personal auto policy, and the insurer didn’t know the vehicle was being used for that purpose.

The bottom line is it’s always best to be honest with your insurer. Consider the case a food delivery driver who was picking up an order when someone hit his car in the parking lot and fled.

“So that person was gone. The driver reported it to the police and filed a claim with their personal insurer. And then through that claim the personal insurer realized they were picking up for a delivery (company). This is not something they were aware the vehicle was being used for,” one claims specialist told Canadian Underwriter.

“And that’s (why) these claims are denied. It’s because the company wasn’t advised. It’s a misrepresentation of use.”

-With files from Canadian Underwriter

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