Not all food delivery apps offer car insurance. What are your options?

Demand for meal delivery services has soared for quarantining Canadians. In turn, people who have found themselves suddenly unemployed due to COVID-19 are looking to food delivery apps for extra income. 

Many of these drivers, however, are unknowingly putting themselves at risk because they don’t hold the proper car insurance. 

Personal car insurance policies may not cover you if you get into an accident while delivering food because driving for a meal app is considered a commercial activity, which, technically speaking, requires a commercial car insurance policy. 

Insurance endorsements that might protect drivers for meal delivery (optional coverages that you can add to your personal policy) aren’t widely available in Canada. Your car insurance company might agree to cover you, but it’s up to their discretion and decided on a case-to-case basis. 

The consequences of not being properly insured can be financially devastating, dealing another blow to drivers who turn to these apps because they’re already in precarious situations. 

The trouble with meal delivery insurance

Insurance companies were relatively quick to launch products that accommodate drivers for ride-sharing apps, but they haven’t reacted in the same way to meal delivery services.

Most types of delivery services fall into the realm of commercial insurance, says Elektra Hilton, director of operations at HUB International, an area that personal auto insurance providers “don’t even want to touch.”  

When you’re driving for personal use, it’s common to have passengers riding with you, and insurance companies are prepared to insure the risks that this presents. Chauffeuring pizzas, however, is a different story, at least in the industry’s point of view. 

Basically, don’t expect special endorsements for meal delivery drivers to become commonplace any time soon. “It’s a different range of insurance,” Hilton says.

How to avoid policy cancellation

Car insurance companies can outright cancel your personal policy if you file a claim for an accident that was caused while driving for a meal delivery platform. 

In 2019, for example, a Burlington woman had both her personal car insurance policy cancelled and her ensuing claim denied after getting in an accident while couriering a meal for Skip The Dishes. 

Drivers must inform their insurance companies that they intend to drive for a meal delivery service before signing up to avoid outright cancellation — and that advice applies even if the app provides commercial insurance coverage. 

Having a cancellation on your insurance record can make it hard to find another insurance company willing to provide coverage to you, and if you do, your premiums will be higher. It takes years for a cancellation to be wiped off your record. 

If you’re already driving for an app and want to avoid having this happen to you, Hilton advises following these steps:

• First, contact your insurance company

• If they won’t cover you, stop driving for the app. If you stop driving for the delivery service altogether, your existing policy will remain in place

• If you want to continue driving for a meal delivery service, look for a new insurance company and verify that they will provide coverage for meal delivery apps

• Purchase a new policy from the new car insurance company

• Then, cancel your existing personal policy

If you’re thinking about joining a meal delivery app, contact your insurance company before you sign up and complete any trips. Not notifying your insurance company could land you in big trouble.

Where do I find meal delivery insurance?

Intact Insurance created a commercial insurance endorsement in partnership with Uber. Coverage is only available to UberEats drivers, and covers them while they’re logged into the app and are in the process of making a delivery. The coverage pays up to $2-million in benefits for property damage and bodily injuries sustained by a third party (i.e., the person you hit). 

DoorDash also appears to offer Canadian drivers commercial car insurance: up to $1-million in coverage that pays for bodily injury and property damage to third parties. But this is excess insurance, meaning DoorDash drivers have to file a claim through their personal auto insurance company first. Like with UberEats, the accident has to happen while you’re on active delivery and are in possession of the food to be delivered.

Besides these offerings, LowestRates.ca found that Wawanesa is also temporarily allowing drivers to use their cars to deliver meals using third-party apps if the new coronavirus has affected their livelihood and, as a result, they’ve turned to food delivery to earn some extra income.

By contrast, other car insurers like Aviva have said they would allow meal delivery, but only if it was done for volunteer purposes. 

In Ontario, insurance companies aren't obligated to offer specialty coverages, which means food delivery endorsements are hard to come by. We strongly recommend only signing up with a platform that provides commercial insurance to drivers.

How meal delivery services stack up

At the moment, UberEats and DoorDash appear to be the only meal delivery platforms that provide commercial insurance to drivers at no additional cost. (LowestRates.ca contacted DoorDash and SkipTheDishes for this story but did not receive a response.)

Uber Eats

Insurance offered: A commercial policy for Uber Eats drivers offers the following coverage:

• $2 million in third-party liability coverage ( only from the time you accept the order until its conclusion)

• Uninsured/underinsured motorist

• Collision and comprehensive (but only if you have collision and comprehensive on your personal policy, and you have to pay a $1,000 deductible before the coverage kicks in)

What their website says about car insurance: According to Uber: “The commercial auto insurance that Uber maintains on your behalf when you’re on a delivery trip by car in Ontario is provided by Intact Insurance. That insurance [covers accidents] that occur between accepting a delivery and reaching the delivery destination.”

Skip The Dishes

Insurance offered: We weren’t able to find evidence of insurance offerings on its website.

What their website says about car insurance: According to the site, the requirements to be a Skip courier are “a reliable vehicle, a valid driver’s license vehicle insurance, vehicle registration, and a background check.”

DoorDash

Insurance offered: DoorDash will top up drivers’ liability coverage if the damage exceeds the limits in their personal policy (this is what’s known as excess coverage):