Delivering food is a great way to make money. Many Canadians are driving for delivery companies like SkipTheDishes, DoorDash and Uber Eats, especially now because of the COVID-19 pandemic.
And, Canadians are eating it up. According to a 2019 Angus Reid survey, 29% of Canadian consumers have ordered food through a delivery app at least once. Of those consumers, 52% are between the ages of 18 and 34. Moreover, the data shows food delivery apps are more popular in central and western Canada than in Quebec and the Atlantic provinces. Manitoba has the highest usage rate at 45%, followed by Alberta (36%), Ontario (34%), B.C. (33%) and Saskatchewan (32%). Only 15% of consumers in Quebec and the Atlantic provinces use food delivery apps.
Regardless, if you decide to work as a food delivery driver for either a food delivery service through a mobile app or for a restaurant in your neighbourhood, be sure you understand the ramifications it may have on your auto insurance policy. On that note, do you know if you have the right type of coverage for delivering food?
Food delivery auto insurance: why your personal policy doesn’t deliver
Whereas rideshare businesses like Uber and Lyft have insurance policies to cover their drivers, the same may not be true for people who deliver fast food or take out.
Drivers may use their vehicles in most cases unless the delivery company provides them with a vehicle (which is unlikely). The problem, though, is auto insurance companies don't honour personal policies if a driver is in a collision while delivering food. Why? When you work for a food delivery company, you are using your vehicle for a commercial purpose. Your auto policy is not designed to provide coverage for business purposes.
You may need to get a commercial vehicle auto policy but understand it may cost you more. Some insurers will offer a food delivery insurance endorsement to tack on to your personal auto policy. In either scenario, the cost depends on how often you work, how much you drive, when and where.
It’s also worthwhile to keep in mind that any car insurance policy offered by a food delivery company may be limited in scope, and it may not provide you with the full protection you need if you get into an accident. As with any auto policy, the details are in the fine print.
Don’t dash and dine: going without food delivery insurance will cost you
If you think you can get by without either a food delivery insurance endorsement or a commercial auto policy, think again. Drivers making food deliveries without commercial insurance who file a claim are treated as if they have no insurance at all.
You should never use your vehicle for commercial purposes without the right protection. If there's an accident, provincial health will cover emergency care. However, rehabilitation and extended care costs are the driver's responsibility. Liability falls on drivers, and settlement for at-fault drivers can exceed $200,000 in some cases. Also, be aware your insurer could cancel your policy if they find out that the use of your vehicle changed and you did not let them know.
Getting a commercial auto insurance policy
Some food delivery companies require drivers to obtain a commercial auto policy.
Like your personal car insurance policy, commercial auto insurance includes liability coverage, protection for property damage, as well as coverage to pay for injuries to you or other people if you are involved in an accident. Although some food delivery companies will provide their drivers with car insurance, there are usually limitations on the coverage provided.
The bottom line is this: if you decide to get into the fast-food delivery game to deliver pizza or any other kind of food, talk to your insurer or broker first. Make sure you have the car insurance coverage you need, and that your insurer has the full details on the type of delivery work you intend to do.