Delivering Food and Auto Insurance (Comprehensive Guide + Rates)

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79 percent of Americans buy what they need online — often with just a few taps on their smart phone. That’s a drastic jump from the 20 percent that shopped online back in 2000.

Food delivery is projected to grow by 12 percent every year through 2023. Just think what that market will look like considering the $30 billion in delivery sales U.S. restaurants made in 2015.

“There could be a scenario where by 2030 most meals currently cooked at home are instead ordered online and delivered from either restaurants or central kitchens.” — Forbes

We can have just about anything — from a toothbrush to a hot meal — arrive at our front door thanks to Amazon, UberEats, Grubhub and millions of restaurants and businesses (wisely) jumping on board. But, who makes this impatient, demanding dream of ours a reality?? The often overlooked, underappreciated delivery drivers.

Okay, time to dig into this growing business and give you the fast (and complete) facts you need so you don’t go bankrupt trying to make a few bucks!

Think you could maybe lower your rates or improve your coverage? Compare a few policies using our free tool.

Table of Contents

Delivery Drivers in America — Insurance Coverage Requirements

On average, U.S. delivery drivers only make $13.82 an hour (as of January 2019), which isn’t much especially once you factor in the monthly costs we all face. Here are the 2017 averages from the U.S. Department of Labor:

  • Housing – $1,657
  • Food – $644
  • Healthcare – $411

And that’s not to mention the extra miles and wear and tear drivers put on their cars to make all those precious deliveries possible.

We understand why you don’t want to spend your hard-earned money on car insurance. But, breaking the law is the biggest mistake you could make in the business world.

That’s not all! Personal car insurance — the minimum insurance required by law — is usually not enough for delivery drivers.

Do I really need business car insurance coverage?

Here’s some real-life examples to help you know the type of coverage you need:

personal versus business auto insurance coverage

It should be pretty clear now…what category do you fall in?

Is your business use under 100 miles a day and three times a month? Then personal coverage is probably enough, but confirm with your provider because every policy is different.

What happens if I use my personal policy for business use?

It’s not a big deal to just fib a little on how much you are using your car for business purposes, right? WRONG!

Here are just a few reasons why lying to your car insurance provider will only hurt you:

  1. When a claim is filed — think accident of any kind — insurance companies do thorough research before they pay. If you were using your vehicle to deliver say pizza, Chinese food, or a nice couple to the stadium (for money) your provider WILL FIND OUT!
  2. Accident reports are taken by the police. All witnesses and people involved in the accident are questioned. If you were transporting paying customers or delivering food, those key details will be in the report. But, you’re safe if no accident report was filed, right? Nope! Everyone involved in the crash will be filing a claim with the specifics of what you were doing, and again — your provider will find out!
  3. What happens when your provider finds out you were using your vehicle for business on personal coverage only? They will deny your coverage. When your coverage is denied and you are at-fault you will have to cover all medical bills and damages out-of-pocket and (in almost every case) you’ll lose your driver’s license.

Your insurance provider is like your best friend — there for you when you need them — until you withhold information or lie to them. See, it’s really not a friendship; it’s a business. They aren’t going to pay if they don’t have to. If you get caught in a lie, that’s on you.

Ask yourself: Is saving a little money now worth going bankrupt later? Is one mistake while making one delivery worth losing your job and freedom to drive?

After all that, once you finally get your license back and (hopefully) find a new company that will insure you, you’re going be stuck paying much higher rates:

“The National Insurance Crime Bureau estimates the direct cost to you at around $200–$300 per year extra tacked onto your premium. The indirect costs are likely to be far more than that, estimated at around $1,000 per family according to the Texas Department of Insurance.” — Fox Business

Important! Those extra costs won’t be getting you any extra coverage. You’re going to be charged more for the same, basic coverage simply because you no longer are on their low risk, trusted customer list. Oh yes, insurance companies have every right to do that.

How much more will I have to pay for business coverage?

Now that we know who needs business car insurance coverage, let’s discuss the cost.

Plain and simple: Business coverage is more expensive than the basic personal auto plan. Here’s a visual comparison:

Personal versus Business coverage versus the combo: rates 2019

Click here for the driving record, vehicle, company, and personal profile used to obtain the above rates.

Don’t get too caught up in the price difference. Clearly upgrading to business auto coverage is going to cost more money. But, when you take the honest route in the insurance world, the money you put towards your insurance pays you back!

Business coverage is going to safeguard your job and your investments!

What does a business car insurance plan cover?

A personal or standard auto policy covers you and your vehicle for social use and for basic commuting to and from work.

On the other hand, a business plan will cover you while you’re travelling long distances to various job sites, hauling equipment or tools, delivering goods, transporting people, and making sales.

Just to be clear: A basic, personal car insurance plan WILL NOT cover you or your vehicle for any sort of extended or direct business use, which most certainly includes a food delivery job.
Here’s how Insurance Information Institute (III) plainly puts it:

“Do not expect to rely on a personal umbrella policy for any claims that arise from business use of a vehicle. Typically, the personal umbrella excludes all claims occurring in the course of a business endeavor.”

There are various levels of business coverage you can purchase depending on the number of drivers you need on your plan, the travel miles required, and the type of vehicle you’ll be driving. All of these factors will determine your rates and coverage amounts.

Using an unbiased, free price comparison tool will help to ensure you are getting the best prices possible on your business plan.

Why is business auto coverage more expensive?

You have to pay more to get more coverage. Plus, in the insurance world higher costs almost always boil down to two words: risk and liability. With every extra mile you drive, you are a higher risk and increased liability to your insurance company.

The U.S. Department of Labor reported for 2017: delivery, truck drivers, and car salesmen had the most deaths on the job of any civilian occupation.

In this case “deaths on the job” means traffic accident, which is no huge surprise since there’s six million car crashes in the U.S. on average every year.

Individuals who drive while on the job are at a higher risk to be injured or killed in a traffic accident. Insurance companies know this all too well.

And, it’s not just dangers on the road food delivery drivers face.

In the article, “Delivering Pizza Is One of the Most Dangerous Jobs in America” you’ll find some shocking stats including:

“In 2014 alone, at least 20 pizza delivery drivers were shot in the US…We’re talking about a semi-thankless profession, in which solitude is the biggest bonus. Tips are nice, but odds are you won’t clock more than $100 per night. Not to mention, you’re wearing down your own vehicle, and opportunities for career advancement are slim.”

Working a job that requires driving puts you at a higher risk than many professions. Be sure to lock down a solid business auto plan that will cover damage and hospital bills before you hit the road — and hopefully nothing else — on your next shift.

What is the difference between business and commercial coverage?

Many consumers — and sometimes even providers — use the terms business and commercial interchangeably, but they technically carry a different meaning. Insurance can be so confusing, huh? That’s why we’re here to help!

Commercial car insurance coverage is a step up from an individual business plan. Think of business coverage as a smaller, more personal type of commercial auto insurance plan.

Commercial car insurance is required for work vehicles owned by the business that are driven by the company’s employees.

In addition, commercial coverage is required for specialized trade vehicles that perform tasks on the job such as cement trucks and dump trucks. Plus large delivery vehicles, tanker trucks, and 18-wheelers are called “commercial vehicles” and require this extended coverage.

As far as price goes, commercial coverage is more expensive than a basic business policy. Again it boils down to risk.

A basic food delivery vehicle is in normal traffic situations and typically only driving to nearby destinations, while commercial vehicles are much larger and usually driving further — higher risk for damage and injury.

For example, buses and tractor-trailers are much larger than typical food delivery vehicles. The larger the vehicle the higher the cost to insure due to the increased risk of damage.

What insurance coverage do I need for delivering pizza?

Most likely, your insurance company doesn’t have a specific line of insurance officially named: “Pizza Delivery Drivers,” but we can guarantee they will have specific plans that meet your needs.

Across the U.S., most pizza restaurants do not cover their delivery drivers. The majority only require that their drivers have a license and minimum car insurance coverage. What’s quite concerning is that many pizza shop owners have a “Don’t ask, don’t tell policy.”

Here’s what a nationwide survey of pizza restaurant owners uncovered:

Pizza shop owners' insurance policy for their drivers

What does this mean for pizza delivery drivers? At the majority of pizza places, the responsibility to get adequate coverage for the job falls solely on the drivers.

84 percent of pizza places across the U.S. don’t require their drivers to have more than minimum coverage — and 13 percent of those shops don’t care if you have any insurance at all!

With commercial and business insurance coverage costing much more than the minimum liability plans, most pizza delivery drivers out there are saving their money and hoping for the best. As a Papa John’s spokesperson said:

“If my driver is only making $50 a week and is paying $200 extra for insurance for delivery, I don’t know how many drivers I would have.”

This is a troubling reality. Since just one accident could put the restaurant, delivery driver (and his beloved car) out of business — permanently.

How expensive is business auto insurance for delivering pizza?

With $45.1 billion sales in the U.S. alone in 2018, pizza is an unarguable staple across America. Which is why we are highlighting this round customizable, cheesy cuisine, but it doesn’t matter what you’re delivering . . . flowers, dumplings, pasta, seafood . . . if you’re being paid to do it, it requires business coverage.

As discussed above, the restaurant you deliver for might not require it, but if you care at all about your vehicle and job itself, you’ll invest in business coverage.

“I think it’s important for people to know that if they have a teenager, or if they get somehow involved in the pizza delivery business that there’s new exclusions in their personal auto policy that may affect them. It could mean inadvertently that they have voided all their coverage on their auto policy. It’s kind of tragic.” — American Insurance President John Sullivan

As you look at the below rates just remind yourself that a basic, personal policy most likely won’t pay a penny if you crash while rushing to make a delivery.

Pizza and all food delivery cost of business auto insurance policy compared to basic plan

Click here for the driving record, vehicle, company, and personal profile used to obtain the above rates.

“Delivery service drivers are among a group of occupations with the highest fatality rate in the United States. Undoubtedly, pizza delivery is a difficult profession, but it’s not just drivers who are in danger during a crash. Everyone on the road is a potential victim.” — Crosley Law

Food delivery drivers are pressured to deliver the food while it’s hot (or cold out of the fridge/freezer), and their earnings are usually minuscule without decent tips. The fresher the food and faster the delivery, the better their pay, which means delivery drivers are more inclined to speed and run stop signs and red lights.

Many people think it won’t happen to them — until it does. No one is immune to the dangers on the road, which is why you need to invest in car insurance that will actually cover you when we need it most.

What insurance coverage do I need to drive a food truck?

Attention food truck drivers! One of the top providers in the nation, Progressive, has a division of their company (and official website) dedicated to their commercial car insurance coverage . . . and Progressive Commercial offers a specific line of coverage called “Food Truck Insurance.” Cool huh?

Every company and auto policy is different, but below is a helpful chart showing examples of specific food-on-wheels businesses that will require this type of coverage.

Examples of vehicles requiring food truck insurance coverage

When it comes time to purchase an insurance policy, ask yourself what value you attach to each of the essential elements of your business. What would you pay to protect what’s necessary to fuel your success?

Don’t let the years of dreaming, planning, and financing your business all go down the drain in a single instant — without sufficient insurance, all it will take is one accident or injury.

Below are examples of types of business policies you’ll need (or at least need to consider) for your food truck business. The rates listed are minimum annual estimates. Keep in mind, the rates vary greatly depending on the type of food truck, value of your business, number of employees, state requirements, and much more.

Lines of Insurance to Protect Your Food Truck BusinessCoverageRequiredCost
Commercial Auto InsuranceDamage and liability claims due to a traffic accident involving the food truckYes$1,200+
Workers' CompensationMedical bills and lost wages for employees who are injured on the job — usually covers legal feesYes (most states)$1,400+
Property InsuranceThe food truck, attachments, and equipment in a collision or theftNo$500+
General Liability InsuranceInjury and property damage relating to the business i.e. food poisoning or customer getting burntNo$500+

How expensive is commercial auto coverage for a food truck?

Hate to break it to you, but insurance to protect you, your food truck, your equipment, your employees — your entire business model is a MUST…and it’s gonna cost you.

When it comes to the food truck industry, insurance is a vital piece to your business-planning puzzle.

Since the above non-specific rates we provided were the absolute minimum, we wanted to give you some specific rates based on actual facts. Check out the state, driver profile, insurance provider, and business specifics we used here — your factors might be very different, but this at least shows you what an actual food truck owner in a real-life scenario pays.

Food Truck Coverage Costs. Personal versus Business versus Both

Do those rates seem crazy high to you? Certainly a big jump in price than the coverage pizza delivery drivers need.

Three things you must realize about the commercial coverage food truck rates shown above:

  1. The above premiums are for a food truck valued at $200,000 – this is a no joke business vehicle
  2. This is insurance for a large vehicle with explosives inside: a kitchen on wheels. Talk about risk!
  3. These rates come straight from Progressive Commercial for a food truck in South Carolina

Use our free tool to see what the cost would be to legally drive your food truck on public roads where you live.

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What insurance coverage do I need for catering?

Catering in the U.S. is a massive, rapidly growing industry famed for tactfully dishing out amazing food – exactly when and where you need it – and it’s bringing in impressive amounts of dough.

In fact, from 2013 to 2018, the catering industry in America grew by 1.8 percent — reaching a revenue of $12 billion! During those five years, catering businesses grew by 3.5 percent and the number of employees increased by 3.3 percent.

You know what can turn out the lights on your catering business in just a matter of days? An accident involving any one of the drivers transporting food or equipment — an accident where the driver and/or vehicle aren’t covered by a business car insurance policy.

Accidents happen, and they likely won’t harm your business when you do the responsible thing and get the required commercial coverage before it’s too late.

One thing that’s guaranteed, insurance providers aren’t going to pay for a claim if they don’t need to. They will investigate. It’s easy for them to determine that the vehicle was being used for a business purpose at the time of the crash. Don’t risk it, or you’ll regret it.

Are you a catering business owner or an employee of the company? That makes a huge difference in the type of auto insurance policy you need.

The catering business owner has a long list of insurance policies to consider for protecting his/her business. Likely, the Business Owner’s Policy (BOP) will cover their employees when they’re driving on the clock. As the employee, make sure you fully understand the coverage (or lack thereof) before you hit the road on the job!

As a catering business owner, there are many laws you’ll need to know like the back of your hand. For example, here are some specifics from the Texas Restaurant Association:

How expensive is auto coverage for catering drivers?

The U.S. Department of Labor reported that accidents relating to transportation accounted for more deaths than any other type of on-the-job injury.

There were 4,160 American employees killed in “transportation incidents” from 2016 to 2017.

In those same two years, the next highest cause of fatal injury on the job was “falls, slips, and trips” accounting for 1,736 deaths — 42 percent less fatalities!

The crash stats prove, the most dangerous job you can do involves transportation. Insurance companies know all to well (confirmed by claims) that those who drive for work are at a higher risk for deadly collisions. Unfortunately for catering drivers, with increased risk comes higher premiums.

Click here for the driving record, vehicle, company, and personal profile used to obtain the below rates.

Catering business auto policy price comparison

Silver Lining! If the catering company owners don’t have a Business Owner’s Policy (BOP) that covers their drivers, at least the business coverage for catering is typically much cheaper than it is for pizza delivery.

What’s the coverage needed for employed drivers versus business owners?

The biggest difference here is that business owners need to invest in coverage that protects their business.

The business owner has more than just auto coverage to worry about such as property insurance, workers’ compensation, liability insurance, and more.

On the other hand, the driver just needs to be sure he or she is covered in the event of a crash while on the clock.

If the business owns the vehicle — it doesn’t matter who is driving the car — a personal auto loan WILL NOT cover that vehicle. A vehicle owned by the business MUST be covered by business insurance.

Again, an established business will (should) have a complete Business Owner’s Policy (BOP), and that insurance plan should include business auto insurance that covers employed drivers.

Essential Takeaway: Before you accept a job that requires driving, get full details on the business’ insurance coverage. Don’t worry, it’s not rude or offensive in any way. As the employee, you are legally required to have those insurance specifics as they directly affect your safety and financial stability.

The company owners will be impressed that you’re responsible enough to care about such important matters. You’ll outshine the interviewee who’s focusing on dress code. Plus, if one of their employed drivers isn’t insured and gets in a crash, their business will likely get sued.

What happens if I get in an accident while on the clock?

Your fate in this moment is based solely on one thing: were you properly insured at the time of the accident??

Remember those “Choose Your Own Adventure” books? Well, the insurance you paid for (or did you?) before the crash determines if you have a happy, prosperous or sad, broke ending to this particular “adventure.”

If you get in an accident while driving on the job…

Scenario 1 – You have only personal auto insurance coverage and no coverage from the business you work for.

  • You will likely have your insurance claim denied by your provider
  • Your insurance policy may get canceled because you used your vehicle in a different way than agreed upon with the insurance policy
  • The others involved in the crash will likely sue you and/or the business you work for to recoup the costs of their damages and medical bills

Scenario 2 – You have no auto insurance of your own and none from the business you work for.

  • Depending on the severity of the crash and your state laws, you face losing your license
  • You and the company you work for will likely get sued

Scenario 3 – You have business auto insurance of your own and no coverage from the business you work for.

  • Your business or commercial insurance should cover the resulting damages and costs
  • Hopefully you purchased enough coverage that you don’t have to pay anything out of pocket
  • You will likely see an increase in your premiums as a result of this crash and the claims

Scenario 4 – You have only personal insurance of your own, but full coverage from the company you work for.

  • The coverage from the company you work for should pay for all the expenses
  • Hopefully the business owners invested in adequate coverage and don’t get sued for more money
  • Your personal car insurance shouldn’t be affected at all by this accident

BY FAR the best case scenario is number four, driving for a company that has complete coverage for all of their drivers and business vehicles. Think about that when you’re on your next job search!

The second best scenario is number three: having great business or commercial coverage of your own that fully covers you while you’re on the road for work. The only downside here is that you’ll likely have higher premiums after you file a claim.

What companies have commercial auto insurance that covers their delivery drivers?

Business and franchise owners typically can make their own decisions in regards to insurance, which means the auto insurance available to delivery drivers might vary from location to location. But, we did extensive research to give you the most current, helpful insurance info we could find.

Check out the below chart showing which delivery businesses provide coverage for their drivers. We included 32 popular companies that provide deliveries all over the U.S. The chart includes links to resources explaining what the companies provide for coverage or what they require their drivers to have for personal coverage.

Amazon FlexYes
Liability: $1 million
Uninsured/Underinsured: $1 million
Comprehensive and Collision: $50,000
(if you have your own comprehensive and collision coverage)
Liability: $1 million
Uninsured/Underinsured: $1 million
Comprehensive and Collision: $50,000
(if you have your own comprehensive and collision coverage)
Amazon Prime NowYes
Liability: $1 million
Uninsured/Underinsured: $1 million
Comprehensive and Collision: $50,000
(if you have your own comprehensive and collision coverage)
Up to $1 million per accident for medical expenses
$100,000 accidental death benefit and $100,000 survivor's benefits (eligible dependents)
Accidental Disability benefit up to $500 per week
Liability: $1 million (you have to exhaust your own coverage first)
Drivers use a company truck for deliveries
Google ExpressYes
Drivers use a company truck for deliveries
Jimmy John'sNo
Olive GardenNo
Papa John'sNo
Drivers use climate control company trucks to deliver groceries
Pizza HutNo
Liability: $1 million (you have to exhaust your own coverage first)
Provides delivery through Instacart
Round Table PizzaNo
Liability: $1 million
In between trips: $50,000 per person/accident
$100,000 per accident
$25,000 for property damage
Drivers use a company car for deliveries

Some of the companies listed above don’t have insurance policies that cover their delivery drivers as a set rule, but specific store owners can choose to provide auto coverage for their drivers — and some do!

Pizzasurance, which provides auto insurance coverage for business owners, lists Domino’s, Papa John’s, Pizza Hut, Round Table Pizza as companies it’s a “Preferred Broker” for.

Another exception to the above chart would be if business owners decided to have company cars used for their deliveries. In that case, the business would be financially responsible for any damages or injuries caused in a traffic accident while the driver was on the clock.

Which insurance providers offer insurance as an add-on for delivery drivers?

As you can see above, there are some delivery companies that have business insurance that covers their drivers, but it’s important for all delivery drivers (and parents of teens in the business) to realize that MOST DO NOT.

More often than not, delivery drivers are held responsible for their own business/delivery auto coverage. If you didn’t already, click here to learn why you should never risk making even one delivery on insufficient coverage.

Thankfully, now that delivery jobs are so prevalent across America, many insurance providers are offering delivery coverage that you can add to your personal policy at a lower price than purchasing a full business line.

There are delivery-only lines of coverage (goods or food only), policies for those providing rideshare services, and even packages that cover all on-demand services.

See some examples of what specific providers offer below and follow the links for more detailed coverage information:

  • Allstate – Rideshare coverage add-on; only for Uber, Lyft, and UberEats drivers
  • Crump Property & Casualty – Hired and non-owned delivery policies;
    Premium starting at $1,250. Minimum deductibles of $2,500
  • Geico – Add-on coverage for any on-demand app;
    Costs about $20-$25 more a month
  • International Property & Casualty (IPC) – Hired and non-owned delivery policies;
    Up to $1 million in coverage options; premiums start at $2,700
  • Progressive: Food delivery coverage; can be adjusted for busier months
  • State Farm – Food/goods delivery only add-on for about a five percent premium increase
  • Sunderland Insurance – Hired and non-owned delivery policies;
    Up to $5 million in coverage options

What insurance providers exclude food delivery from personal policies?

We would like to repeat: If you get in an accident while using your own vehicle covered by personal insurance while working a delivery job, your claim will be denied — you’d be hard-pressed to find an exception to this statement.

In case you like to play fast and loose, be aware that many insurance companies now explicitly state they EXCLUDE all delivery jobs from their personal coverage policies.

Beware! Allstate, Geico, Progressive, and State Farm all make clear statements that their personal auto insurance policies do not — under any condition — cover claims made by employed delivery drivers.

Readers, please realize that even if it isn’t clearly stated, business use is not covered by personal insurance. Insurers simply do not need to pay!

How Insurance Premiums and Rate Increases Are Determined

Our team of expert car insurance analysts collected annual rates for delivery drivers from a top provider in the U.S., Progressive, using the following specific profile details.

Food Delivery – Personal Only Versus Business Only Versus Business + Personal Rates

  • Profile – single 45-year-old male, homeowner, bachelor’s degree, employed: food delivery, no tickets or accidents in last two years, licensed three or more years
  • Insurance – insured with the same company three or more years, no lapse, current bodily injury limits $100k–$300k
  • Vehicle – 2016 Honda Accord EX, four-door, owned, 12,000–15,000 annual miles driven
  • Location – South Carolina, 29687

Pizza Delivery – Personal Only Versus Business Only Versus Business + Personal Rates

  • Profile – single 45-year-old male, homeowner, bachelor’s degree, employed: food delivery, no tickets or accidents in last two years, licensed three or more years
  • Insurance – insured with the same company three or more years, no lapse, current bodily injury limits $100k–$300k
  • Vehicle – 2016 Honda Accord EX, four-door, owned, 12,000–15,000 annual miles driven
  • Location – South Carolina, 29687

Food Truck – Personal Only Versus Business Only Versus Business + Personal Rates

  • Profile – single 45-year-old male, homeowner, bachelor’s degree, employed: food truck, no tickets or accidents in last two years, licensed three or more years
  • Insurance – insured with the same company three or more years, no lapse, current bodily injury limits $100k–$300k
  • Vehicle – 2016 Honda Accord EX, four-door, owned, 12,000–15,000 annual miles driven (for personal and personal + business)
  • Food Truck – Valued at $200,000
  • Location – South Carolina, 29687

Catering – Personal Only Versus Business Only Versus Business + Personal Rates

  • Profile – single 45-year-old male, homeowner, bachelor’s degree, employed: food delivery, no tickets or accidents in last two years, licensed three or more years
  • Insurance – insured with the same company three or more years, no lapse, current bodily injury limits $100k–$300k
  • Vehicle – 2016 Honda Accord EX, four-door, owned, 12,000–15,000 annual miles driven
  • Location – South Carolina, 29687

And there you have it. Are you ready to start making money as a delivery driver? If so, make sure you get the best insurance rate by entering your ZIP code in our free quote comparison tool.

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