Food Delivery Apps and Insurance

If you recall we had discussed the topic of ridesharing previously. Insurance coverage is still evolving around this topic, but a new development has become increasingly popular throughout COVID. This is the use of food delivery apps. Some of these include DoorDash, GrubHub, UberEats, among many others developing daily. If you are unaware, this service is exactly what it sounds like – the customer orders food from a restaurant on an app, and a driver (driving for the service app) delivers the food to the customer.

Food Delivery Stages

As was the case with ridesharing, there is an insurance issue that surrounds these delivery services. Before we get into the insurance issue let’s go through the steps of driving for the app much like ridesharing:

• Stage 0: The delivery app is off.
• Stage 1: The delivery app is on, but you have not accepted an order/pickup yet.
• Stage 2: You have accepted an order and are driving to pick up the order.
• Stage 3: You have picked up the order and are on your way to deliver to the customer.

DoorDash Insurance Coverage

Each delivery service handles insurance differently, but we will focus on one of the most popular services – DoorDash.

During Stage 0, your own personal insurance policy covers you as this is normal driving.

In Stage 1, your personal insurance policy NO LONGER COVERS YOU. You are now driving for commercial/business purposes. DoorDash’s insurance does NOT cover you during this stage.

In Stage 2, your personal insurance policy still does NOT cover you. However, note that their insurance policy provides liability insurance only. There is no physical damage coverage provided, which means any damage to your vehicle that is your fault is not covered. The repairs fall completely on you.

In Stage 3, DoorDash’s insurance still covers you until you drop off the order at the destination.

Other services similar to DoorDash will most likely offer different insurance or perhaps none at all. If you are a driver for one of these services, make sure you are aware of what coverage is offered to you.

Gray Area

Now we turn to how your insurance can cover you. As more of these types of apps and services develop, so does the insurance surrounding them. REMINDER: commercial use of your personal vehicle is excluded from your personal auto policy. The gray area around food delivery apps and insurance are there isn’t a widely accepted ISO form that excludes or provides coverage on your personal auto policy. So, for the time being, insurance companies each have their own stance on the topic.

Some carriers have already adopted their own wording in their policies that explicitly excludes coverage for food delivery of any kind. Other companies are allowing temporary coverage for drivers due to COVID as long as they list their vehicles for business use. A few carriers have even grouped the food delivery apps with Uber/Lyft and are offering the same endorsement extending some coverage to the driver during the process.

Don’t Assume

The bottom line is that there is no guarantee you have coverage throughout the entire process unless you have a conversation with your insurance agent. This is a difficult insurance scenario currently due to it being a new development, along with the rapid increase in popularity due to the pandemic. Don’t assume you have coverage no matter where and for what purpose you drive your vehicle. If you are unsure of an insurance topic, please reach out to your insurance agent.