Do Food Couriers Require Commercial Auto Insurance?

In all questions of commercial auto insurance, we can basically break it down to this: If you drive your car to work, your personal auto insurance covers it. If you drive your car at work, you probably need to consider commercial auto insurance.

image of pizza delivery guy

This extends to food couriers. If you make your living delivering pizzas, burgers and Chinese food to hungry customers — whether as an employee of a restaurant or through a food-delivery app like Uber Eats — your car will likely be considered a commercial vehicle. You will need a commercial auto insurance if you hope to carry adequate protection.

You may be able to skip buying your own coverage if the company you work for provides insurance. Uber Eats, for instance, offers a limited insurance policy that covers you while you are in the process of delivering the food. DoorDash offers a similar insurance plan. However, these plans may leave you with insurance gaps. If you are in an accident while driving to the restaurant to pick up the order, the company’s plan might not offer coverage for that stretch of time, and your personal auto insurance provider might not recognize your claim, as the accident was technically business-related.

Talk to your insurer and find out what their policy is on food couriers. They may offer you full protection through your personal auto insurance while you are on your way to a pick-up, but only if you inform them that you are using your car for business purposes.

While personal insurance can be very limited in covering a commercial vehicle, the inverse is not true. A commercial auto insurance policy will cover your car when you’re driving it for personal use.

So, if you deliver food on a regular basis, it may be a good idea to consider buying commercial auto insurance rather than a personal vehicle policy.

What Happens When Your Driver Hits a Pedestrian?

image of man in commercial work vanThere is nothing more devastating than a pedestrian accident. Your driver didn’t see the individual walking across the street. The location of the individual was just too far out of view. The result is a significant amount of medical injury costs. Some are fatal. When this occurs, it is critical that your drivers know what to do. Here is some insight to consider.

Know the Risks Are Not in Your Favor

Having a commercial auto insurance policy is step one in protecting your company from these claims. It is also important to recognize that this type of accident is very common. According to the Governors Highway Safety Association, there were 6,227 pedestrians killed in the country in 2018. That is a very high number, and it shows the number of pedestrian deaths is on the rise.

Many of those incidents involved larger trucks or commercial vehicles. The risk is there. You have commercial auto insurance to minimize the financial loss. Now what?

Teach Your Employees How to React

In a situation like this, an employee needs to know what to do. He or she should immediately stop the vehicle. They should exit the vehicle. Most of the time, they should call 911 if someone else has not. Even if the pedestrian seems okay, a call can be critical to documenting what happened.

If an individual needs medical help, your driver should follow all instructions from the 911 operator in what to do. It is also important for the driver to remain present on the scene at all costs.

Then, your driver needs to answer questions from the police and document the incident fully. Witness statements can also be helpful. If the person ran out into the street and hit the side of the truck, it may be possible to reduce negligence claims. On the other hand, if the driver knows he or she is at fault, there is no benefit in lying. However, he or she should allow their insurance agent and attorney to answer these claims. It can help to safeguard the company.

Commercial auto insurance is there to help you, as the business, in a situation like this. The liability coverage helps pay for damages. It may also provide legal defense for your company. Most often, the insurance will settle these types of claims with the person who suffered the loss for you.

Applying for and Paying Commercial Auto Deductibles

Just because your commercial auto insurance policy might pay for a multitude of costs, that does not mean it will cover 100{a541fd55b4e0d4e9971b708588f4843c35e284359cc6236557ff1a39fc4ae69a} of the cost of your claims. When you file a damage claim on your policy, you will likely have to pay the cost of the deductible. What are deductibles? How can you manage to pay them?

image of oil tanker truck

Understanding Deductibles

A deductible is a policyholder’s personal responsibility for the cost of a commercial auto insurance claim. Your policy will list a deductible (sometimes multiple deductibles) that policyholders must pay before a policy pays the remaining claim amount.

For example, your commercial auto collision coverage might include a $1,000 deductible. So, if you hit a light pole, you can file a claim on collision insurance to pay for your vehicle repairs. You will pay the $1,000 deductible first, then your policy will pay the remainder of the claim. For example, if you have a claim for $3,000 total, then you will pay the $1,000 deductible and the policy will pay the remaining $2,000, since ($3,000 – $1,000 = $2,000).

Do All Policies Contain the Same Deductible?

The deductibles available within commercial auto policies will vary considerably. In some cases, policies will even contain multiple deductibles. Elements of your policy that might contain deductibles include:

  • Collision coverage that pays for your vehicle if it sustains damage in wrecks.
  • Comprehensive coverage insures your vehicle damage that results from non-accident hazards like fires or theft.
  • If you have uninsured/underinsured motorist protection, you might have to pay a deductible on related claims as well.

Liability policies usually will not include deductibles.

Sometimes, you must pay several separate deductibles at once if you have to file a claim on multiple parts of your policy. However, sometimes, you might be able to buy what is called a single deductible endorsement. If you buy this element, even if your policy has multiple deductibles, you will only pay the highest deductible triggered by a given claim. That’s a great benefit for commercial drivers. It will save them money on the cost burden of deductibles.

Drivers can use their commercial auto insurance deductibles to their financial benefit. The higher the deductible(s) you choose, the lower your policy’s premium might be. That happens because if you raise your own cost responsibility, you will lower that of an insurance company. Because they might not have to pay as much money for claims you file, they might not have to charge you as much.

Given that commercial auto policies can contain a lot of different deductibles, it’s best to ask your agent up front about how those within your own policy will work. Ask them where you have leeway to change yours to suit your own cost responsibility. You don’t want to pay so low a deductible that your rates might unfairly rise. However, you don’t want one that is so high that your business can’t afford to pay it anyway.