Gig Workers: Your Personal Car Insurance May Not Cover Your Accident During a Delivery

Moscow, Russia: Yellow taxi with Uber logo on the street. Yellow taxi cab with checker pattern. Uber taxi cab. stock photo
OxAvdeenko / iStock.com

In 2021, 41% of people surveyed were using money from a side gig to pay their monthly bills, GOBankingRates reported. Additionally, 27% of gig workers polled spent more than 15 hours per week on their side hustle, up from 12% in 2020.

Discover: 22 Side Gigs That Can Make You Richer Than a Full-Time Job
More: 50 Ways You’re Throwing Money Away

The Pew Research Center reported that the top gigs included driving for a ride-hailing app (such as Uber or Lyft), shopping for and delivering groceries, performing household tasks and running errands, making food deliveries (for restaurants or for an app like DoorDash), or using their personal vehicle to deliver packages.

If you read that list carefully, you’ll see that four out of the five top side gigs almost certainly involve driving your own vehicle while you’re doing the job. Household tasks such as home-cleaning may or may not require your own vehicle.

But many people may not realize that they could be taking unnecessary risks in using their personal vehicle for a side gig. Forbes recently reported that you may not have the auto insurance coverage you need if you are driving a personal-use vehicle while working a side gig.

Make Your Money Work Better for You

Do You Need Commercial Auto Insurance While Working a Side Gig?

One common problem gig workers run into is not having commercial auto insurance if they’re using their personal vehicle to earn money. Car insurance providers view “business use” of a vehicle as riskier than personal use; those who drive for work may spend more time on the road and may be in a hurry to reach their destination. Without commercial auto coverage, you may not be able to file a legitimate claim if involved in an accident.

In 2020, the Bureau of Labor Statistics reports, 1,778 fatal occupational injuries occurred amongst driver/sales workers, representing 37.3% of all work-related fatalities. In another study by the Worker Institute of Cornell University, 49% of app-based delivery drivers reported having been in an accident or crash. Seventy-five percent of those injured reported having to pay for medical care out of their own pocket, the survey said, since gig workers aren’t entitled to worker’s compensation for on-the-job illnesses or injuries.

Make Your Money Work Better for You

If your side gig involves driving your personal vehicle, you will want to find out if your employer provides insurance. If not, check with your insurance company to see if you need additional insurance coverage.

If Your Employer Covers Your Insurance, Is There a Gap?

Even if your employer has an insurance policy that covers you in the event of an accident while you’re making a delivery, it may not cover you if you’re driving to pick up an order from the restaurant. If you don’t have appropriate private coverage, your employer’s insurance company could also deny the claim, according to Forbes.

Does Your Company Provide Auto Coverage?

Policies vary widely amongst delivery companies and apps. According to Forbes, Uber and Amazon Flex provide commercial auto insurance for all drivers, except in New York state, where drivers must obtain their own coverage.

Postmates and DoorDash have “excess” policies, which kick in after your own policy limits have been exhausted.

See: POLL: What Do You Think of Elon Musk Buying Twitter?
Find: Uber and NYC Yellow Cabs Announce Deal, Propelling Stock Up Nearly 5% 

Make Your Money Work Better for You

Instacart and GrubHub require drivers to have their own auto insurance, which means you should check with your insurance company to see if you need a commercial policy.

Policies may change at any time, so it’s important to check the current requirements before you take on a gig that requires driving — whether you are delivering food or transporting people.

More From GOBankingRates

About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

Best Bank Accounts of May 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.