In recent years, the rise in demand for food delivery services has opened up questions about insurance for food delivery drivers. If you want to start an independent delivery business, what type of insurance do you need? Will you need restaurant insurance? Here’s a look at what professional couriers need to know about auto insurance.
Coverage Devoted to Food Delivery Drivers
The complex maze of commercial auto insurance versus personal auto insurance policies may seem too vast to study in one day. However, all you need to remember is that although every insurance company is different, most of them conform to the same principles. Regardless of its similarities with commercial auto insurance, personal auto insurance will likely not cover driving for business activity.
Basic commercial property and liability policies provided by employers only cover so much. To get proper coverage, you need to discuss your operations with an insurance expert. From there, you can work together at customizing a policy with add-on coverage plans based on your industry’s risks.
It’s typical for companies with their own delivery services, such as Amazon, to insure their drivers up to $1 million in liability coverage. Amazon also pays $1 million in uninsured/underinsured coverage and $50,000 in comprehensive and collision coverage. Food delivery firms Uber Eats and Postmates also give drivers the same level of liability coverage.
Different Types of Courier Coverage
Various types of coverage are available for independent food delivery drivers. Many of them choose a commercial policy, which usually costs more than a personal auto policy. The factors affecting the rates include- the type of vehicle used for business purposes, the worker’s driving record, and location. A business use policy is a meaningful option if you deliver food over short or long distances, haul equipment, or transport people.
As a delivery driver, you don’t necessarily need restaurant insurance coverage unless you work directly for a restaurant. Even then, the company’s policy might not completely cover you for every possible type of accident on the job. So you can supplement such coverage with your commercial auto insurance.
Keys to Lowering Premiums
If you plan on doing food delivery service for a while, you might as well work on getting the best insurance rates. Since your driving record has a major influence on auto insurance rates, you can ask your provider for a discount if you have no violations on your record. It also helps if you’ve filed minimal to no accident claims over the past several years.
Another way to lower the cost of food delivery driver insurance is to take a defensive driving course recognized by your state. Then share your positive results with your insurer. If you are a high school or college student and carry a grade point average of 3.0 or more, you may be eligible for a “good student discount.” Your credit score and amount of driving also affect your auto insurance rates.
Overall, insurance companies view food delivery drivers as at higher risk than motorists who use their vehicles for personal use. So, be prepared to pay a little more for commercial auto insurance. Contact us at RMS Insurance Brokerage, LLC for more information on the coverage you need for your profession.