Will My Car Insurance Cover Me if I Deliver Pizza?
You’ve just obtained what seems like an easy after-school and weekend job where you get paid to cruise around town and meet residents: a job doing pizza delivery. One late night near the end of your shift, you are starting to get sleepy and accidentally rear-end the car in front of you at a red light. Thankfully, no one was injured, but both the front end of your vehicle and the back end of the other car are a bit banged up. Though you were definitely at fault, you have collision coverage on your vehicle, so you know the cost of repairs to both your and the other car will be covered -- or so you think.
When you call your family insurance agent to file an auto insurance claim, she says she’s sorry -- but because you were using your car for business purposes, you’re not covered by your policy.
Home pizza delivery has become as American as, well, pizza. And while "pizza delivery guy" is never going to be a professional career title, it can certainly provide some much-needed income for a person between regular gigs or a student in search of a little part-time work after class. One thing we all know is that most pizza delivery men and women make those deliveries in their vehicles. And unless you have done it yourself, you've probably never considered what might happen if you were to get into an accident while working your delivery job.
Let me break it down for you so you can make sure you are covered properly.
Am I covered by my personal insurance policy?
Most likely not, although it depends on the specific language of your policy. Though you may not think of it that way, pizza delivery is a risky business: The United States Bureau of Labor Statistics found that delivery and other sales jobs involving driving is the 5th most dangerous job in the country.
But your pizza delivery driving is not just exempt from your car insurance policy because it’s viewed as being dangerous: It’s also likely not covered because, well, it’s not personal – it’s business.
A personal auto insurance policy is meant to be just that: coverage for one's personal driving needs, and delivering pizzas for which you are being paid is not considered "personal use" by most insurers. This applies not only to pizza delivery, by the way, but to other types of delivery as well, such as drug store deliveries and even transporting people. Pretty much any enterprise where one uses his or her personal vehicle for a commercial purpose. The reason is simple: Insurers know that drivers operating their vehicles for commercial purposes spend significantly more time on the road, which means a substantially higher risk of being involved in an accident.
And that, in turn, means additional costs for the insurer.
How about if I'm driving my parents' car under their personal policy?
The same thing. Although you would probably be covered under your parents' policy for an accident that occurs while driving their car for personal reasons, that coverage will not extend to your use of their vehicle for a commercial purpose -- like delivering pizzas. Don’t use your parents for cover!
What will happen if I get into an accident while delivering pizza and I only have personal insurance on my vehicle?
Nothing you are going to like. Your current personal policy requires that you inform the insurer if you plan to make any substantial change like the use of your vehicle, and that includes using it to make deliveries for pay. And when you do, your insurer will not only warn you that you will not be covered, they may additionally tell you that by using your vehicle for commercial purposes you will invalidate your policy, even for personal use. So, what happens if you use your car to deliver pizza, anyway, and get into an accident?
Your insurance company is going to deny your claim, and you will be stuck with covering the entire cost of any resulting damages.
Don’t even think about lying. During the claims adjustment process, the insurance company will do a thorough review of the circumstances, and you can be sure that any accident in which they find evidence of business activity (like a pizza sign affixed to the top of your car or evidence of your employment) will be one which they will be happy not to cover.
What if I just don't tell my insurance company that I was delivering pizzas when the accident happened?
Again, nothing good. If an accident report is taken by the police, you can be certain that it will mention what you were using your car for at the time. And you can be just as certain that a copy of that report will find its way to your insurer. If no police report is taken, you still won't be off the hook because the other driver is bound to tell his or her insurance company and they will pass the information onto your insurer. Either way, your insurance company will not be happy. And, besides denying coverage for the accident, they may very well cancel your policy, or your parents' policy if you were using their car.
In many states, denial of coverage from your insurer for an at-fault accident could also lead to a revoked driver’s license. Try explaining that to your parents.
How Do I Get Insured?
There are a few possibilities for getting the necessary coverage for your pizza delivery gig:
- Coverage Through Your Employer Some employers (particularly chain and larger independent restaurants) provide coverage called hired and non-owned vehicle liability insurance for their drivers when using their personal vehicles for work-related activities. Be sure to ask your employer if this type of coverage is available.
- Commercial Insurance The most common insurance choice will be to switch over to a commercial vehicle policy. Check with your insurance company and other drivers where you work to find out what's out there. In most cases, a commercial policy will cost more than a personal one, but the difference in price may be manageable. The key here, as with most things involving auto insurance, is to shop around.
- Pizza Delivery Insurance OK, it's probably not going to be called "pizza delivery insurance," but there are a few insurers out there that do offer special policies, or supplemental coverage to a personal policy, specifically for delivery persons. Again, talk with your agent and your fellow drivers about what's available.