Insurance: the sour note of a food delivery side-hustle

The cost of living in British Columbia is expensive. We all know this. In the never-ending quest to make ends meet people are turning to companies such as Uber Eats, Skip The Dishes, DoorDash and Foodroa to earn some extra cash on the side. It seems like an attractive prospect. Be your own boss, choose your own hours and, crucially, you can drive your own vehicle.

While working for a food delivery service may be an ideal way for people to fit an extra job around their main occupation, there is a catch: insurance. A lot of people don’t realize they need to pay more for special coverage. For those who only deliver part-time, this added cost may drastically eat into how much they can potentially earn.

What’s more, if you don’t tell your insurer that you are using your personal vehicle for a commercial purpose, it could invalidate your coverage.

What insurance plan do food delivery drivers need?

Most personal auto insurance policies cover you for the day-to-day use of your vehicle. If you use a vehicle that is only covered for personal use while working for Uber Eats or a similar company, your insurance may be voided. ICBC uses different rate classes to insure vehicles depending on what you want to use it for. If you want to use a vehicle for food delivery, it will fall under the delivery rate class. Delivery drivers have a higher risk of being involved in an accident because they spend more time on the road. This means they pose a greater risk to insurance companies so insurers charge more.

It may be possible to simply add delivery coverage to an existing personal policy if you talk to your provider. The problem, however, is that the cost of the additional policy can make a side-job unprofitable. If your main job is a delivery driver, you could probably work enough hours to justify the expense, but if you’re only doing it part-time, it might make the whole endeavour pointless. Part-time delivery drivers may end up relying on tips in order to make a profit.

“They might be paying money for an insurance policy that’s essentially worthless.”

What if a delivery driver has an accident while off-duty?

With the added cost of delivery vehicle insurance, some delivery drivers might be tempted to simply not tell ICBC about their side-gig. But what if someone who works for Uber Eats or Skip The Dishes is involved in a collision while using their vehicle for personal use?

If ICBC discovers you are using your vehicle for commercial use, it may decide the whole policy is void. If you use your vehicle for any purpose not specified in the insurance policy, it can be enough for ICBC to refuse to give you a payout. Some might believe they are saving money by working under their personal insurance policy, but in fact, they are potentially voiding their entire coverage. They might be paying money for an insurance policy that’s essentially worthless. They could find themselves suddenly in the hole for huge costs in the event of an accident.

ICBC has different rate classes depending on whether you drive your vehicle as part of your job, for commuting or only for personal use. If you use a vehicle for anything other than the uses specified in the rate class, it can deny you coverage. In this case, for example, an appeal against ICBC’s decision to refuse to pay for damages to a tractor involved in an accident was dismissed. The BC Supreme Court judge found that because it was being used to haul logs, rather than the delivering and dumping of materials specified in its insurance policy, ICBC had sufficient grounds to deny payment.

What about scooters and bikes?

There are lots of food delivery drivers who use scooters to get around. Some scooters do not require licensing to get around and can be covered under home insurance. Are these exempt for the need for delivery rate insurance? Commercial use of the vehicle will probably cause an insurer to deny the claim under personal policies without an additional endorsement.

Bicycles are one way around expensive insurance policies if you are a food courier as they do not require insurance. Delivering on a bicycle would obviously drastically reduce the range and speed at which you are able to work when compared with a car or bike.

What about Uber?

Although the start of ride-sharing services such as Uber and Lyft may seem like a long way off in BC, for now, it is highly likely those drivers would need a business rate insurance policy. Taxi drivers, truckers, limousine drivers and more all require some form of commercial insurance.

We can help

We defend ICBC accident cases from the accident stage to a resolution either through negotiation or in court. Our goal is to ensure that ICBC insurance coverage under your contract with ICBC is fulfilled by ICBC. We want to make sure that you get ICBC insurance coverage to protect you from a financial disaster.

If you have an accident and you are concerned that ICBC insurance coverage might be at stake, call us on 604-685-8889.