Driving for a living, whether you deliver food, shop for groceries or transport passengers, can be a flexible way to earn extra income or build a full-time job behind the wheel. But before you accept that first request, make sure you understand how your auto insurance may apply while you are working.
The key question is: Does your insurance cover you while you’re working?
The answer may not be as straightforward as you think.
Personal Insurance May Not Be Enough
Your personal auto policy is generally designed for everyday driving, such as commuting, errands and personal trips. Using your vehicle to earn money through a delivery or rideshare service may be treated differently.
That doesn’t necessarily mean your coverage ends the moment you turn on an app. Instead, coverage can depend on your insurance company, policy, state and what you’re doing when an accident occurs.
For example, there can be important differences between simply driving your car, being logged into a delivery or rideshare app, waiting for a request, and actively completing a delivery or transporting a passenger.
Don't Assume the App Has You Fully Covered
One of the most common misconceptions among gig drivers is that the company they drive for automatically provides all the insurance they need.
Some platforms provide certain insurance coverage during specific portions of a delivery or passenger trip. However, that coverage may be limited and may not protect the driver, the driver's vehicle, or every stage of the workday.
For example, DoorDash currently states that it provides third-party liability coverage during an active delivery in most U.S. states, but that coverage does not pay for damage to the driver's own vehicle. DoorDash also notes that personal auto insurance may not cover delivery activity.
Instacart's current contractor information states that independent contractors are responsible for obtaining applicable insurance, including automotive liability insurance.
Coverage can also change over time and may differ by state and platform. For that reason, drivers should review the current insurance information provided by each company they work with.
What Coverage Should You Consider?
Depending on your situation, you may want to ask an insurance professional about:
- Personal auto insurance — Your standard coverage for personal driving.
- Rideshare or delivery coverage — Some insurers offer coverage specifically for gig drivers.
- Commercial auto insurance — May be appropriate for certain types or levels of business use.
- Liability coverage — Can help protect you if you are responsible for injuries or property damage.
- Collision and comprehensive coverage — Can help protect your own vehicle from covered damage but ask whether it applies while you are working.
- Uninsured/underinsured motorist coverage — May help if you're involved in an accident with a driver who has little or no insurance, depending on your policy and state.
What About Driving Passengers?
Passenger transportation can have different insurance requirements. Rideshare companies may provide insurance during certain portions of a trip. Ask both the rideshare company and your insurance provider exactly what coverage applies during each stage.
A Few Questions to Ask Before You Start
If you are comparing insurance options, you may want to speak with an independent insurance agent who works with multiple insurance companies. An independent agent may be able to help you compare different approaches and identify insurers that offer coverage appropriate for your type of driving.
Before accepting your first gig, consider asking your insurance agent:
- Does my current policy allow me to use my vehicle for delivery or rideshare work?
- Am I covered while I am logged into the app but waiting for a request?
- Am I covered after I accept a delivery or passenger?
- Does my collision and comprehensive coverage apply while I am working?
- Would a commercial auto policy be more appropriate for my situation?
- What happens if the platform's insurance and my personal insurance both potentially apply?
- Are there state-specific requirements I need to know about?
- If I work for multiple platforms, does my coverage apply to all of them?
Getting the answers before an accident occurs can be much easier than trying to determine your coverage afterward.
The Cost May Be Worth Considering
Adding appropriate coverage may increase your insurance costs. Additional insurance could cost relatively little or it could significantly reduce what you earn.
Your cost can depend on factors such as your driving history, location, vehicle, coverage limits and the type and amount of work you do. In some situations, the additional insurance expense could make gig driving less financially attractive.
When calculating your potential income, remember to consider more than the amount shown in the app. Fuel, maintenance, tires, depreciation, taxes and insurance can all reduce your actual earnings.
Protect the Vehicle That Helps You Earn
For many gig drivers, their vehicle is also their source of income. An accident, theft or other loss could create a significant expense and potentially prevent them from working.
The goal isn't necessarily to buy the most expensive insurance. It's to understand your risks, identify potential coverage gaps and choose protection that makes sense for your situation and budget.
Before hitting the road, do your research, review your policy and platform terms, and talk with an insurance professional about your options. The right coverage can look different for every driver, so make sure you understand what your insurance does and does not cover.