Car insurance for Dashers: Do you have the right type of coverage?

Overview: Many Dashers might think their auto insurance fully protects their vehicle, but coverage gaps may exist. Standard personal auto policies typically exclude coverage for business use, which may leave a Dasher’s vehicle without coverage for damage during delivery activity. This article explores these gaps, explains different insurance options available and highlights how a standard State Farm auto insurance policy may apply.

As the popularity of DoorDash® has grown, many drivers have joined the platform to earn extra income on their own schedule. However, Dashers may be under the misconception that their personal auto insurance fully protects them and their vehicle while they’re working. Understanding the potential gaps in coverage and choosing the right car insurance may help protect you from costly out-of-pocket expenses in the event of an accident.

Factors that determine whether you’re covered while Dashing

Before diving into coverage specifics, it may be helpful to understand a couple of key distinctions that shape insurance policies.

Business use vs personal driving

Many standard auto insurance policies are designed with personal driving in mind, such as running errands or taking a trip. However, when you use your vehicle for dashing, it may be considered “business use.” This distinction matters because insurers might treat these activities differently in terms of risk and coverage.

The insurance coverage gap

Insurance companies price their policies based on the level of risk they’re taking on. Personal use is generally lower risk while business use is typically considered higher risk since it involves more frequent driving, longer hours and higher accident potential. Because of this increased risk, many standard personal auto policies explicitly exclude or limit coverage for commercial activities. Understanding this gap — the space between what your personal auto policy covers and what you may need while delivering — can help you choose insurance options that better protect you and your vehicle.

How does standard car insurance work for Dashers?

Standard personal auto policies are designed to offer coverage for everyday driving and typically exclude business use. So, if you get into an accident while dashing, your insurance could deny the claim and you might be left to pay for any damages yourself, such as vehicle repairs, medical bills, third-party liability claims and more.

Understanding insurance protection

Let’s break down what different types of insurance may provide, and what they may not.

What the auto insurance maintained by DoorDash generally covers

DoorDash maintains insurance on behalf of Dashers. However, there are some limitations based on the state you are in as well as what you are doing on the platform at the time an incident occurs. For instance, coverage is provided while a Dasher is actively making a delivery but may not apply when a Dasher simply has the Dasher app open. Also, this coverage primarily handles third-party liability, which means if you accidentally harm someone else’s property or injure a third party, it may help cover those costs. But it typically does not cover damage to your own vehicle, medical expenses for your injuries or other losses you personally sustain. In other words, the insurance maintained by DoorDash may offer protection in certain cases, but it may not fully protect you and your vehicle. While medical expenses may not be covered by this insurance, Occupational Accident Insurance provided by DoorDash may offer protection.

What standard personal auto policies provide

Your standard personal auto insurance is typically designed for non-business driving. It covers accidents that occur during everyday personal use, such as running errands or taking road trips.

But the moment you log onto the DoorDash Dasher app, many policies limit or exclude coverage entirely. Even if you have collision coverage, you may find that your insurer won’t pay a claim if they discover you were logged onto the app or delivering at the time of the accident.

Commercial and rideshare insurance options

Recognizing the gap, many insurance companies now offer options. Some require you to add a commercial-use endorsement to your policy. Others offer separate rideshare or delivery-specific insurance policies. Many insurers in this space require these add-ons.

State Farm, on the other hand, takes a different approach. At this time, our standard personal auto policy may extend coverage to delivery activities without a separate commercial or rideshare endorsement required.

Why State Farm is different

A State Farm standard personal auto policy may offer coverage for driving while delivering with DoorDash, subject to eligibility and policy terms. This means you might not need to purchase a separate commercial endorsement or rideshare-specific policy to be covered while delivering with DoorDash.

A local State Farm agent can help review your specific situation, answer your questions and help you understand your coverage. Additionally, State Farm provides multiple discounts that may apply to your policy, which may help reduce your overall costs.

Helpful steps toward better protection

Consider taking the following steps to evaluate your current situation, identify any gaps and make informed decisions about your insurance protection.

• Review your current auto insurance policy for business-use exclusions.
• Understand the specific coverage limits that apply when you are using the DoorDash platform.
• Contact your insurance agent to discuss delivery coverage options.
• Add commercial endorsements if needed.
• Keep copies of all insurance policies handy (on your phone or in your glove box) while logged onto the DoorDash platform.

Key coverages to prioritize for Dashers

When evaluating insurance options, consider these essential coverages:

• Liability — liability coverage helps protect you if you’re found to be responsible for injuring someone or damaging their property.
• Collision — collision coverage helps protect your own vehicle in the event of an accident.
• Comprehensive — comprehensive coverage helps cover damage from non-collision events such as theft, vandalism, weather, or hitting an animal.
• Uninsured/underinsured (UM/UIM) — UM/UIM coverage offers protection if you’re hit by a driver without insurance or not enough coverage.
• Medical Payments (MedPay) — MedPay coverage helps cover your medical expenses if you’re injured in an accident, regardless of who is at fault.

Depending on whether you’re delivering full-time or as a side gig, you may also want to discuss your coverage limits with your insurance agent to help ensure they’re adequate for your driving volume and risk level.

Additional answers to common questions

Here are some answers that may help you further your understanding of insurance maintained by DoorDash.

• Does the insurance DoorDash maintains cover my vehicle? The policy covers up to $1,000,000 in bodily injury and/or property damage to third parties when you are on active delivery in most states. It generally doesn’t cover your vehicle.
• What happens if I have an accident while I’m Dashing? If you are in the U.S. and are injured during an active delivery, you may be eligible to receive occupational accident coverage. This coverage may help pay for medical expenses, disability payments and survivor’s benefits.

Your auto insurance coverage matters

Insurance plays a significant role in helping protect yourself and your vehicle while delivering. Coverage gaps may exist between what personal auto policies provide and what you may need when working as a Dasher. Understanding your coverage is valuable information as you make decisions about your insurance needs.

To learn more, talk with a State Farm agent today.