What kind of auto insurance do you need for DoorDash?

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DoorDash is one of the fastest ways for virtually anyone with a vehicle, valid driver’s license, and proper auto insurance to start earning an income. The company tries to avoid making specific statements about how much money a driver can earn, as this can vary wildly depending on many factors, but it was clearly enough for the company to literally pull in millions. of contracted delivery drivers on its platform. . Since you’re reading this, you might also be interested in food delivery for DoorDash, and you might want to know what that means in terms of getting the right car insurance to protect you.

food delivery man checking the phone

What kind of auto insurance do you need to drive for DoorDash?

Before you rush out with the keys in hand to start driving for DoorDash, keep in mind that you need more than your private auto insurance policy to drive for DoorDash. The company may not specifically verify that you have added commercial coverage to your insurance policy, but you will be out of luck with your insurance company if you are involved in an accident while driving for DoorDash.

delivery driver giving food to customer

Do I need to tell my insurance I’m driving for Doordash?

Yes! When you use your car to drive for DoorDash (or any food delivery business), that’s considered business. To remember:

  • Your personal auto insurance policy does not cover business use of a vehicle. If you drive for a delivery company, like Doordash, you use your vehicle for business purposes, not just for personal use. You work with your vehicle and personal auto insurance policies don’t cover you when you deliver food for Doordash
  • You can most likely get business use coverage from your private insurance provider. However, you’ll need to call them ahead and let them know you drive for DoorDash and want to add business use coverage to your policy. On the bright side, this extra coverage usually only costs a few extra dollars per month.

How does car insurance work with DoorDash?

courier

DoorDash also covers all drivers who have a contract with them. Their policies cover up to $1 million in bodily injury and/or property damage resulting from a collision with another driver during a delivery. You must be actively participating in a delivery for this to apply.

On the other side of the coin, you are required by the company to carry your own car insurance to protect you against accidents in which you are the responsible party. The company will NOT step in and pay for any damages you cause while delivering with them. You will likely face the following consequences if you have an accident during delivery for DoorDash:

  • Deactivation from the platform
  • The possibility of having none of the damage covered (if you haven’t added business use coverage)
  • Your insurance policy may be canceled or your premiums may increase
  • You can accumulate points on your driving record
  • You could get a ticket

Needless to say, being involved in an accident is never ideal, but the consequences can get worse if you don’t take important precautions in advance.

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What are the pros and cons of getting additional driver’s insurance for DoorDash

Doordash driver giving out food

All potential drivers should stop and weigh the pros and cons of adding business use coverage to their private insurance policy if they decide they would like to drive for DoorDash. Creating a list that helps them see how getting this coverage may or may not benefit them in their DoorDash driving business is the best way to figure out how to proceed.

Advantages
  • You’ll know you’re covered by accident insurance even if the accident was your fault
  • It only costs a few extra dollars a month for that peace of mind
  • You are expected to purchase business use insurance to participate as a DoorDash driver to begin
The inconvenients
  • Depending on the exact cost and how much you earn on DoorDash, you may lose money on this proposition
  • You may need to register for business use for a longer period of time you will end up driving for DoorDash

Overall, most drivers decide that a few extra dollars a month is worth paying if they don’t have to worry about the worst-case scenarios that could happen to them in the event of an accident while driving for DoorDash. .

Does DoorDash offer insurance for its drivers?

food delivery man getting out of the car

DoorDash does not directly have an insurance product that it offers to a food delivery driver. The company provides basic liability insurance to cover drivers involved in an at-fault accident while on delivery.. However, this insurance is not intended to protect the driver, but to protect the company against the possibility of a lawsuit.

As mentioned above, drivers are responsible for paying for their own company auto insurance at all times if they wish to maintain full protection against any potential accidents while driving for DoorDash. The company does not provide this service and does not currently offer it.

Affordable car insurance that can protect you while you work as a delivery driver

There are many car insurance companies that will be happy to work with you to provide you with the car insurance quotes you need. They want to win over your customer base and know that many customers shop around to find the best products. This is why there is an ongoing price war between major insurers across the country. So the quotes provided here are subject to change, but we wanted to give you an idea of ​​what some of the more affordable companies offer.

All prices are listed as the annual cost of state minimum insurance, so you should add a little to these for business use coverage, and more if you want more comprehensive plans:

graph of the estimated average rate for car insurance for professional use

You might look at these numbers and think it’s pretty clear that everyone should go to USAA to get their coverage. They might be a great brand to select, but that’s NOT a guarantee that’s the one you should go with. They may not be available in your area or may not agree to provide specific coverage for your vehicles. You need to consider some of these factors before deciding who to go with. Shop around and see the specific quotes these companies can offer you before figuring out who to go with.

Do people think driving for DoorDash is worth it?

delivery man getting out of the car

There is always a question asked by those exploring the idea of ​​driving for DoorDash about how lucrative it can be and what kinds of considerations they should make. You need to consider your costs when making your choice.

These food delivery services often don’t like to mention the costs drivers incur to participate in the program. They’d rather ignore it because they know it’s information that drivers aren’t as thrilled about. That said, it’s also extremely relevant given that every driver has to decide for themselves whether it’s worth it.

To better understand this, let’s look at a typical example of what a driver might earn and how that income might break down after all expenses are taken into account:

  • The driver makes two deliveries per hour at an average price of $8.50 per delivery.
  • The driver earns $17 for the hour before expenses.
  • The cost of insurance for professional use adds $15 to their premium or about $0.50 per day.
  • It costs about a gallon of gasoline for three deliveries.
  • The price per gallon of gasoline is currently $4 per gallon.
  • Driver car depreciation is $0.30 per delivery.
  • The need for more frequent oil changes comes down to $0.25 per delivery made.
Doordash Driver Earnings Calculation Infographic

If you calculated all of this and assumed the driver was doing the job part-time (4 hours a day) you would see that even though his earnings appeared to be around $68, the reality is that he was only earning $52.43 $ after all these expenses are deducted. This brings their hourly net profit down to $13.10 per hour instead of $17.

That said, that doesn’t necessarily mean everyone should give up driving for DoorDash. Truth be told, $13.10 an hour is a living wage in many areas, and there are plenty of ways to increase your earnings beyond the $17 an hour we talked about in the example. .

There are a lot of people who have been doing this job for a while and earning a lot more than that. So, it’s fair to say that there are different ways to see how lucrative or not DoorDash can be for you specifically, and you should definitely check how much you are capable of earning for yourself before making a final decision.

Final Thoughts

You should always purchase business auto insurance if you decide to drive for a food delivery service. It’s the least of your expenses when considering the cost of operating as a food delivery driver, and it provides you with extreme value in the form of peace of mind about your driving record. and your ability to stay safe on the roads. Remember, you need to commit to staying in the food delivery game for a while to make the cost of insurance worth it.

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