Auto Insurance and Delivery Driving
Delivery driving, whether for pizza shops or gig platforms, involves unique insurance risks that most personal auto policies do not cover. Personal use auto insurance typically will not cover business use of a car for things like delivering pizzas. Commercial auto insurance is required for anyone using their vehicle for business purposes, including food delivery. Major gig economy platforms like Uber, DoorDash and Amazon Flex provide their own commercial insurance solutions, but there are limits. Here’s how it all works.
Why Delivery Driving Requires Commercial Auto Insurance
Personal auto insurance is designed for every day, non-business use—commuting, errands, and personal travel. When you use your car for delivery work, you’re engaging in business activity, which is considered higher risk by insurers. Most personal policies specifically exclude coverage for accidents that occur while the vehicle is being used for delivery or other commercial activities. If you get into an accident while delivering cookies and only have personal insurance, your claim could be denied, leaving you responsible for all damages and liabilities. Some personal policies may offer a business use rider but check before you take the job.
Commercial auto insurance is built to cover these business risks. It typically includes:
- Higher liability limits to protect against claims from injuries or property damage.
- Coverage for business use, including frequent stops, time pressures, and higher mileage.
- Protection for goods in transit, which is essential for delivery drivers.
Without commercial coverage, you risk having claims denied, your policy canceled, or facing legal penalties if you’re caught driving for business without proper insurance. The good news is that for most drivers, the commercial coverage will replace their personal auto insurance, so they won’t need to pay for both.
Why Personal Auto Insurance Falls Short
- Claim Denials: If you get into an accident while delivering pizza and only have personal auto insurance, your insurer can—and likely will—deny your claim. This means you could be responsible for all damages, injuries, and legal costs out of pocket.
- Policy Cancellation: Failing to disclose business use of your vehicle to your insurer is considered misrepresentation. If discovered, your policy could be canceled, leaving you uninsured.
- Legal Non-Compliance: In many states and cities, commercial auto insurance is a legal requirement for anyone using their vehicle for delivery. Driving without it can result in fines, license suspension, or other penalties.
Major Gig Companies are Different
Unlike traditional delivery jobs, Uber and DoorDash provide commercial auto coverage while you’re working for them. Uber, DoorDash and Amazon Flex all require drivers to maintain their state’s minimum personal auto insurance. This covers the driver when they are not actively working for the platform. However, when drivers are actively engaged in work—such as picking up or delivering an order—they provide commercial liability insurance that covers accidents occurring during those periods.
The Table below provides some typical “Gig company” coverage examples.
| Phase | Insurance | What’s Covered? |
| Offline (not working) | Driver’s personal insurance | Standard personal coverage |
| Online (waiting/order) | Platform + personal insurance | Limited liability (e.g., $50k/$100k injury, $25k property for Uber)[3] |
| Active delivery/trip | Platform’s commercial policy | Major coverage. Uber provides up to $1 million liability, sometimes contingent collision/comprehen- sive |
Important Caveats for Gig Drivers
- Personal Policy Still Needed: Drivers must carry personal auto insurance that meets state minimums, as platform insurance is only active during work periods.
- Coverage Gaps: There can be gaps (such as when waiting for an order but not yet assigned one), so some insurers offer rideshare or delivery endorsements to fill these.
- Vehicle Damage: Platform insurance often only covers damage to your vehicle if you have collision/comprehensive on your personal policy.
The Bottom Line
Traditional delivery jobs require commercial auto insurance because personal policies exclude business use. However, Uber and DoorDash do not require drivers to buy their own commercial insurance because they provide commercial liability coverage while drivers are working for them. This hybrid approach balances protection, regulatory requirements, and affordability, making gig driving accessible while still protecting drivers, customers, and the public.
This column is prepared by Rick Brooks, CFA®, CFP®. Brooks is an owner and senior financial advisor at Blankinship & Foster, LLC, a wealth advisory firm specializing in financial planning and investment management for people preparing for retirement. Brooks can be reached at (858) 755-5166, or by email at rbrooks@bfadvisors.com.
Category: Business, Education, Finance, Local News
