There is an increased demand for delivering food items to customer addresses, particularly in the COVID-19 period, so the vehicle operators are also more sought-after for this service. As with the ride-sharing service, businesses such as PostMates attract numerous Americans to serve as drivers who deliver food for them. This is because they are free to establish a delivery schedule, they need not handle people who enter their personal cars as riders, and have fast turnarounds for payment.
As per data from Second Measure, food distribution services had a 24% growth by March 2020 as compared to the same period last year. The best-known food distribution service in LA is PostMates, with DoorDash occupying the second position and Grubhub coming third.
Anyhow, owning a car and paying the insurance monthly will not necessarily make you fit enough to work in the capacity of a vehicle operator for a delivery business. Your private insurance may be sufficient to commit yourself to it, but should a collision occur, you would eventually experience the unequal effect of the situation. This would especially be the case if your insurance is almost sure not to help you pay for the damages owing to the collision.
It takes an extra business or commercial-use insurance policy to do this kind of a job, so the insurance of yours would more than likely not cover your accident damages. The delivery businesses do not typically protect independent contractors against liability, so the situational effect will turn out to be unfavorable to you.
To serve as a driver for businesses such as PostMates, one requires a personal automobile insurance policy covering the commercial utilization of a vehicle. The prices for its business use exceed the rates that apply to personal use, because of the increased danger in traveling by road. The factors that increase the danger of it include any or a combination of the following.
- The number of occurrences in which one has to drive
- The amount of time spent operating their vehicle
- The place in which they do it
- The distraction problems associated with tracking the customer order and checking the GPS navigation
There are business and commercial-use policies intended to protect drivers against the risks present at the time of using their cars for all commercial purposes. Food delivery is a rather new service even today, so the US insurance sector continues to adjust to all the changes. Therefore, you must talk to your present insurer about your options regarding coverage when thinking about becoming contracted to serve as a driver for any food delivery entity.
What PostMates do is commercial, and the same will apply to you when working as a part-time independent contractor-driver for them. Should your own vehicle encounter a collision when you are signed into PostMates’ mobile application, your insurance covering the consequent damages is an unlikely situation.
PostMates necessitates every on-demand vehicle operator to keep an updated personal vehicle liability insurance policy in the auto they use to distribute food for them. The policy must have insurance limits that correspond to or exceed the minimums required for the US state in which those independent contractors work as delivery drivers for PostMates. An explanation on the company site is this: “Property damage sustained to your property in an accident are [the driver’s] responsibility and should be addressed by your personal insurance carrier.”
PostMates offers $1 million as excess liability coverage to accident claims of third-parties, but there is a catch here. It would only apply should the concerned PostMates driver’s personal insurance coverage is used up. As per the limits in the policy, the recently launched Occupational Accident Insurance of PostMates will help pay for lost income and medical costs. The insurance covers every benefit and protection mentioned below.
- The accident-related medical cost of up to $1,000,000 (without any copay or deductible)
- Survivors benefit of up to $100,000
- The accident-induced death benefit of as much as $100,000
- As much as $500 per week for Temporary Total Disability (according to on-demand service replacement earnings)
- As far as $500 weekly for continuous total disability (depending on on-demand service replacement earnings)
- As much as $200,000 for accident-induced dismemberment
It is worth noting that the company would compensate for damages only if the vehicle operator is actively distributing ordered food. They are active from the time they accept any food delivery request on PostMates’ application to when the app records the customer receiving what they ordered. This means in the case the application on your phone is not on or enabled, you would have to fall back on the automobile insurance policy of yours. The same would apply in the case you have not yet accepted the request.
As EntreCourier underlined, “Most personal car insurance policies will not cover you in an accident while you are logged on to do delivery work for a third-party app. That means that your insurance won’t cover you, and Postmates won’t cover you. Be very clear on this: if they are able to identify that you were logged in, not just on an active delivery, they will not cover any claim. If you are delivering for Postmates you need to make sure you have insurance that covers you.”
Commercial insurance as well as business-use additional benefits are potentially costly. PostMates perhaps fares better as compared to their competitors, but you being their driver must confirm that the company properly insures you against a collision. Property damage and injuries possibly arise from it, so you would ideally wish to avoid bearing all related costs by yourself.