Does Doing DoorDash Raise Your Insurance?

Using a personal vehicle for commercial delivery services, such as DoorDash, has become a common way for many individuals to earn income. This type of work introduces unique considerations for car insurance that differ significantly from standard personal driving. Understanding how this commercial activity impacts an existing auto insurance policy is important for drivers to avoid potential financial risks. This article explains the insurance implications for DoorDash drivers, detailing DoorDash’s coverage and additional steps drivers should take for adequate protection.

Limitations of Personal Auto Insurance

A standard personal auto insurance policy is designed to cover risks associated with personal use of a vehicle, such as commuting, running errands, or recreational driving. These policies are not structured to cover accidents that occur while a vehicle is being used for commercial purposes or to generate income. Many personal auto insurance policies contain “business use” or “commercial exclusion” clauses that specifically deny coverage when a vehicle is involved in an accident during commercial activity. This means that if a driver has an accident while making a DoorDash delivery and only has a personal policy, their claim will likely be denied.

The fundamental difference lies in the increased risk profile associated with commercial driving. Individuals driving for income-generating activities, like food delivery, are often on the road more frequently and may face greater time pressures, potentially increasing their exposure to accidents. Insurers categorize this as a higher risk than typical personal driving patterns. Therefore, the terms and conditions of a personal policy are not structured to account for these elevated risks.

Some personal policies might permit occasional or incidental business use without requiring a change in coverage. However, driving for a service like DoorDash generally goes beyond what is considered incidental, as it involves using the vehicle specifically to generate income through deliveries. If an insurance company discovers that a personal vehicle was used for business purposes more extensively than what was disclosed, any resulting claim could be denied. This lack of appropriate coverage leaves drivers financially exposed, as they would be responsible for all costs stemming from an accident.

DoorDash’s Insurance Coverage

DoorDash provides some insurance coverage for its drivers, known as Dashers, but it is important to understand its specific nature and limitations. DoorDash offers third-party auto liability insurance, which generally applies when a Dasher is actively on a delivery, from the moment a delivery request is accepted until the order is marked as delivered, unassigned, or canceled. This coverage is contingent or secondary, responding only after a Dasher’s personal auto insurance policy has denied a claim and provided a denial letter, provided the Dasher is liable for damages or injuries to another party.

The coverage provided by DoorDash is specifically for third-party liability, which covers bodily injury and property damage to other parties involved in an accident. DoorDash’s policy may provide up to $1 million in bodily injury and/or property damage coverage to third parties during an active delivery period. However, DoorDash’s policy does not cover damages to the Dasher’s own vehicle. If a Dasher is at fault in an accident, they are responsible for damages to their own car.

Furthermore, while DoorDash offers occupational accident insurance for drivers who sustain injuries during a car accident, this policy specifically addresses medical expenses and disability, not vehicle damage. This separate policy can provide up to $1 million in medical coverage and up to $500 per week in disability coverage. Dashers must maintain their own primary auto insurance with minimum limits as required by local laws, as DoorDash’s coverage is supplemental and not a replacement for a personal policy.

Obtaining Proper Insurance for Delivery Work

Given the limitations of personal auto insurance and the contingent nature of DoorDash’s coverage, obtaining proper insurance is important for delivery drivers. The most common solution for bridging this coverage gap is to acquire a rideshare or delivery endorsement, also known as a hybrid policy, which can be added to an existing personal auto insurance policy. Many major insurance carriers now offer these endorsements, extending personal coverage to include commercial driving activities like food delivery. This add-on specifically covers the periods when a driver is logged into the DoorDash app and awaiting a delivery request, or is actively on a delivery.

Contacting one’s current insurance provider is the first practical step. Drivers should openly disclose their DoorDash activities to their insurer to understand available options and avoid potential policy violations. Some insurers may offer a specific “business-use” notation or endorsement that can be added to a personal policy, often at a relatively low additional cost. This endorsement ensures that the personal policy remains valid and provides coverage during delivery work.

For drivers who engage in extensive delivery work or utilize their vehicle solely for commercial purposes, a dedicated commercial auto insurance policy might be a more comprehensive option. While more expensive than a personal policy with an endorsement, commercial policies are designed to cover the higher risks associated with full-time business vehicle use. This type of policy offers broader protection, including higher liability limits and coverage for vehicle damage, which is not typically provided by DoorDash. Shopping around and comparing quotes from multiple insurance providers, including those known to cater to gig workers, can help drivers find the most suitable and affordable coverage for their specific needs.

Risks of Inadequate Coverage

Operating as a DoorDash driver without the appropriate insurance coverage carries substantial financial and legal risks. A primary concern is the potential for a personal auto insurance claim to be denied if an accident occurs while actively delivering. Insurers can deny claims if they discover the vehicle was being used for undisclosed commercial purposes, leaving the driver without any coverage. This denial could stem from the “business use” exclusion common in personal policies, which explicitly states that such activities are not covered.

If a claim is denied, the financial burden of an accident falls entirely on the driver. This includes significant out-of-pocket expenses for vehicle repairs. Medical bills for injuries sustained by the driver or their passengers would also become the driver’s sole responsibility. A survey indicated that nearly half of app-based delivery drivers involved in accidents paid for medical care out of pocket due to insufficient coverage.

Beyond the immediate costs, drivers face potential legal liability for damages or injuries caused to other parties. Without adequate liability coverage, a driver could be sued for substantial amounts, leading to wage garnishment, asset seizure, or even bankruptcy. Furthermore, an insurer might not only deny a claim but also cancel the driver’s policy entirely if they discover undisclosed commercial use, making it difficult to obtain future coverage. In some instances, misrepresenting vehicle use to an insurer to avoid higher premiums could even lead to accusations of insurance fraud.