When you join DoorDash to deliver food — becoming a dasher — you’re likely making deliveries by car. This means having good car insurance is critical.
You’re dashing to earn extra cash, not to have to think about premiums and liability coverage. But just glossing over insurance talk can wind up costing you way more money.
For many people, it’s easy to let their auto insurance company know that they need to add more coverage because they are driving faster than before.
While it’s the easiest way to go, it’s far from the cheapest. If you take a few minutes to look around, you can find many good insurance plans from different car insurance companies that will protect you in the worst cases for less money.
Driving for DoorDash and other on-demand food delivery services like Uber Eats has become an increasingly popular way to earn extra income Who wouldn’t want to get paid to drive around listening to music and podcasts while dropping off takeout orders? It seems like easy money
But there’s one big potential catch – your car insurance rates could go up if you start making deliveries I’ve done the research so you don’t have to wonder whether DoorDashing will raise your insurance costs Here’s what I found out.
How Food Delivery Driving Impacts Your Insurance
Most personal auto insurance policies explicitly exclude coverage when using your vehicle for commercial purposes. That includes food delivery services like DoorDash.
This “business use” exclusion is in the fine print of pretty much every personal car insurance policy. Your insurer wants to avoid increased risk that comes with you using your car to make money.
So if you get in an accident while on an active delivery, your insurance company can deny your claim because you violated the terms of your policy. They could even cancel your policy altogether. Not good!
Clearly, you’ll need to get additional coverage if you want to start driving for DoorDash or UberEats. Let’s look at some options.
Business Use Coverage – The Simple Add-On
The easiest option is to contact your auto insurer and ask about adding business use coverage to your existing personal policy.
- This extends your liability, collision, comprehensive, and other coverages to apply when you are using your car for commercial deliveries.
- It’s usually just a simple endorsement added to your policy.
- Cost varies, but expect about a 10% – 50% increase in your premium.
So if you currently pay $100 per month, business use could tack on an extra $10 – $50 per month. It depends on your driving history and other factors.
I recommend starting here since it’s the simplest way to get compliant. If the cost seems high, you can always shop around for better rates.
Commercial Auto Insurance
Another option is switching to a commercial auto insurance policy. This covers your vehicle only when used for business purposes, such as delivering food.
- You would not be covered for personal errands or driving.
- Commercial policies typically cost more than adding business use to a personal policy. They start around $150 per month.
- Makes sense only if you use your car exclusively for delivery driving.
For most part-time food delivery drivers, a personal policy with business use added offers enough coverage at a better price. But commercial policies are worth considering if you’ll be driving 40+ hours per week.
Hybrid Policies For Rideshare Drivers
Some insurers like Geico now offer hybrid policies designed specifically for Uber, Lyft, and delivery drivers.
These provide comprehensive coverage that works for both personal and business use of your vehicle. Benefits include:
- Coverage during Period 1 and Period 2 of rideshare driving
- Lower deductibles or deductible gap coverage
- Rideshare coverage for as low as $10 – $20 per month on top of your regular premium
The hybrid options provide the convenience of having one policy at a competitive rate. Definitely worth checking out.
How Much Extra Will I Pay?
It depends on factors like your driving record, insurance company, coverage limits, and deductibles. But most DoorDash drivers can expect to pay an additional $15 to $50 per month.
Here are estimated increases:
- Geico Rideshare Coverage: $10 to $20 per month
- Progressive Rideshare Insurance: $15 to $45 per month
- Allstate Rideshare Insurance: $20 to $50 per month
- State Farm Business Use Coverage: $15 to $50 per month
Shopping around could save you several hundred dollars per year. But even paying an extra $50 monthly is just $2 per day to have coverage. Worth it for peace of mind!
How To Get Insured For Delivery Driving
Follow these steps when you’re ready to get insured for DoorDash:
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Decide if you’ll use your car for personal and delivery driving, or just delivery. This determines if you need business use or commercial coverage.
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Contact your insurance company to ask about adding business use. Or get quotes from various companies for commercial policies.
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Compare quotes for hybrid rideshare coverage too. These policies are designed for delivery/rideshare drivers.
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Pick the policy that provides sufficient coverage at the best rate.
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Officially update your policy to activate the new coverage.
And that’s it! Just give yourself some extra time in case you need to switch insurance providers to get the most affordable rate.
The Bottom Line
Driving for DoorDash and other delivery apps does increase your insurance costs due to the added risk. But for most drivers, the extra expense amounts to less than $50 per month.
To me, that modest bump in premiums is totally worth it. Dashing is an awesome way to earn solid part-time income on your own schedule. Don’t let worries about insurance stop you from taking advantage of this opportunity!
The easiest option is to add business use coverage to your existing personal policy. But shop around to find the best value. Rideshare focused policies from companies like Geico and Progressive are worth considering too.
With just a little bit of research, you can score a great insurance rate and hit the road delivering orders stress-free! Just be sure to get compliant coverage before making your first DoorDash delivery.
Additional Coverage to Consider Purchasing
Most of the time, food delivery drivers choose to add commercial coverage or business-use coverage to their regular vehicle coverage.
Click on the link for your insurance company or call an agent to find out which choice might be best for you.
Business-use coverage means car insurance that covers your personal vehicle while you use it for business activities.
For doorDash, GrubHub, or Uber Eats food delivery, this means calling your insurance company to let them know you want to cover your own car for business use.
Depending on the rideshare drivers and insurance agents, the increase could be as little as 15% or as high as 20%.
This choice makes sense if you are only going to use your car for work, like as a DoorDash delivery driver or for other business work.
With a commercial policy, your car cannot be used for personal use. You’re not covered when you’re not driving the vehicle for deliveries. You’re only covered when you’re working.
Most Dashers wouldn’t need commercial auto insurance because they only dash part-time to make extra money or because they only have one car that they use for deliveries and personal things.
If you have a car that you will only use for dashing, then commercial car insurance might be a good idea. But just about always, commercial coverage will be more expensive than business-use coverage.
In New York City, TLC coverage may also be required in addition to business or commercial coverage.
New York City’s Taxi and Limousine Commission (TLC) requires minimum specific liability coverage, vehicle standards, a background check, and special requirements to be in compliance. This includes basic driver’s education, an additional driving exam, and laws and regulations regarding passenger assistance, wheelchair accessibility, and sex trafficking awareness. There is also a more rigorous background check.
TLC coverage is required if you pick up any fare-paying passengers in New York City. This NYC insurance is required if the trip starts in New York City, even if you are taking a passenger to Pennsylvania or New Jersey.
DoorDash Offers Limited Liability Insurance Coverage
Unlike other delivery company apps, DoorDash does offer basic liability car insurance for their drivers.
It’s extremely minimal and protects DoorDash from being sued if you are at fault for an accident. It will also cover basic repairs for the other driver’s vehicle.
If you are delivering food with an order in your car, this basic liability insurance is the only one that we offer. You won’t be covered when you’re on your way to the restaurant or to get your order.
This coverage is quite limited (more details in the section below on what DoorDash liability covers). In addition to this limited liability coverage, you are expected to have your own personal car insurance policy.
DoorDash liability insurance covers eligible drivers for up to $1,000,000 as outlined in the Independent Contractor Agreement.
This includes bodily injury, property damage, and damage or injury to other parties in an accident.
The coverage will only kick in if all conditions below are met:
- The Dasher is considered the liable party
- At the time of the accident, the Dasher was making a delivery.
- Their primary, personal auto insurance policy has denied the claim
- The personal auto insurance policy provides a claim denial letter
Does Doordash Raise Your Car Insurance
Do DoorDash drivers need car insurance?
All DoorDash drivers will need to have their own basic car insurance coverage, in addition to a clean driving record and driver’s license. There’s no minimum requirement for coverage limits (i.e., damages up to a certain dollar amount). Rather, drivers are expected to maintain compliance with the state’s minimum coverage requirements.
Does my auto insurance cover delivering for DoorDash?
Your personal auto insurance policy will not protect you when delivering for DoorDash. Fortunately, most insurance companies allow you to easily add business-use coverage or commercial coverage to your policy. For a few extra dollars per month, you can remain completely covered when driving for DoorDash.
Does DoorDash require a personal insurance policy?
DoorDash requires that drivers have a personal insurance policy before they can start delivering with their vehicle, and this is standard with other food delivery and rideshare companies as well. DoorDash insurance is a basic liability policy of up to $1 million in coverage that covers third-party damages for active drivers.
Which insurance companies cover DoorDash drivers?
GEICO: Includes Rideshare coverage with its standard policy, which covers DoorDash drivers. State Farm: DoorDash drivers are covered with the standard policy but must change their vehicle usage to business use. Allstate: Its Ride for Hire program covers gig workers, including DoorDash drivers, but policyholders need to add it to their policy.