Meal delivery drivers often not insured if using personal car, broker warns

Drivers making deliveries for some popular food delivery apps may not know that their personal auto insurance won’t cover them in the event of a collision, potentially leaving them on the hook for a big bill.

Most personal auto insurance policies don't cover vehicles for food or package delivery

Food delivery driver Gary Cormier is warning others they might be left holding the bag if they're not covered to drive and deliver with only a personal vehicle insurance policy. (Paula Duhatschek/CBC)

Drivers making deliveries for some popular food delivery apps might be unaware their auto insurance may not cover them in the event of a collision, potentially leaving them on the hook for a big bill.

Gary Cormier, 49, of Kitchener, Ont. wants to avoid that situation. He's been trying for weeks to find a car insurance policy that he can afford, and that will cover him while making deliveries. 

Cormier signed up with both DoorDash and Uber Eats this spring and was quickly accepted as a driver after submitting proof of his car ownership, driver's license and personal insurance. 

But when he told his insurance broker about the plan, Cormier says he was told his existing policy with Intact wouldn't cover him.

Cormier says he contacted three other brokers for good measure and was told the same thing. 

"If I was just driving on personal insurance … my claim could be declined," said Cormier, who says he stopped making deliveries after that point.

Cormier says his broker later gave him a quote for a commercial driving insurance policy, costing about $10,200 annually.

"It's just not feasible," said Cormier, whose personal driving insurance currently costs about $1,500 a year.

Gary Cormier says he enjoys driving and working with people, and thinks food delivery driving would be an ideal gig for the time being. But he won't do it until he finds an affordable policy that will cover him on the job. (Paula Duhatschek/CBC)

Most personal auto insurance policies don't allow the use of personal vehicles for food or package delivery, according to the Financial Services Regulatory Authority of Ontario. 

That means drivers might not be covered if they use their vehicles for business purposes, the agency said.

'You could lose everything'

Insurance broker Joseph Carnevale says many drivers are likely delivering food and other items without realizing their personal auto insurance policy doesn't apply to their present circumstance. 

Anyone making money by delivering something needs to tell their insurance broker about it, says Carnevale, and in most cases, a delivery driver would likely need to take out a commercial insurance policy to be covered.

"The problem we face is that someone who's just trying to make a few dollars on the side then has to [pay] a substantial amount of money for a proper and legal commercial insurance auto policy," said Carnevale, who is also president of the Insurance Brokers' Association of Ontario. 

"And so there's a scenario out there right now that probably ... the vast, vast majority of people don't have the proper policies in place and that puts them at risk."

Although every situation is different, Carnevale says a delivery driver who didn't have commercial insurance and who submitted a claim after causing serious property damage would likely prompt an investigation and be denied coverage by their insurer. 

That kind of accident could put them on the hook for between $5,000 and $100,000, he says. A worst-case scenario type of collision involving multiple deaths could cost millions, he adds.

"You could lose everything," said Carnevale. 

Company policies vary

CBC News asked DoorDash, Skip the Dishes and Uber Eats what kind of insurance their Ontario drivers need to carry.

DoorDash pointed to a statement on the company's FAQ page saying it does provide excess auto insurance, but this policy only applies toward damage drivers might cause to third parties and only to accidents that happen when a driver is in possession of goods to be delivered.

A spokesperson for Skip the Dishes said in an email that couriers are independent contractors, and it is their responsibility to "obtain and maintain all necessary insurances, permits, and/or licenses required by applicable laws in the region they operate."

SkipTheDishes is an online food delivery service that operates across Canada. The company said couriers are independent contractors who "must abide by all legal requirements pertaining to the operation of a motor vehicle for delivery services." (Kathleen Jones/CBC)

Uber Canada does maintain commercial auto insurance through Intact for both Uber and Uber Eats drivers, a spokesperson said in an email. 

According to a fact sheet on the Intact website, drivers are covered with up to $2 million in third party liability coverage, depending on the stage of the ride they're in. 

Drivers do need to contact their broker or insurance provider to let them know they plan to participate in ridesharing, an Intact spokesperson said in an email. 

A spokesperson for Uber Canada said Cormier's broker was likely misinformed when he was told his insurer did not cover drivers with Uber Eats.

Some insurers have changed their policy in response to COVID-19 to allow deliveries, but the change is aimed largely at those volunteering during the pandemic, says Carnevale.

'A better way'

For now, Gary Cormier says he's exploring one other option: He's awaiting a quote through the Facility Association, which provides insurance to high risk drivers who've been turned down by other insurance companies. 

Cormier expects that, too, will be expensive. But he hopes he'll be able to make ends meet while the pandemic is ongoing and employment options are slim. 

Going forward, both Cormier and Carnevale agree something should be done to keep delivery drivers from getting on the road without the right insurance. 

"They're providing a service that wasn't there and that's needed," noted Carnevale.

"But the ease at which they allow people to continue to do that without providing proof that they've actually got [proper] insurance? That could be changed."