Car Insurance and Delivering Pizzas

I wrote a car insurance policy for a friend’s son last year. It’s an interesting story that’s worth retelling because most people aren’t aware that many car insurance companies won’t write a policy if you or one of your kids does this. You may surprised by this too!

A friend of mine called me last week to ask me about his son and their policy. They have their car insurance with a company headquartered in Texas and he’d just been told they would not cover his son’s car because of the job he has. The son deliver’s pizzas for a franchise owner of a national chain. My friend wanted to know whether any of the carriers I represent would cover his son as a pizza delivery driver.

I called underwriters at all my companies and found out something most parents, and many agents, aren’t aware of. Most car insurance companies will not extend coverage on a personal policy to someone who’s a delivery driver regardless of whether they are delivering pizzas, sandwiches (think Jimmy John’s), or anything else (UberEATS, Grubhub, trycaviar, DoorDash, etc.).

The lone exception is Travelers. They will extend coverage if the driver is in high school or college and delivers pizzas a couple of times per week during the summer vacation between the spring and fall semesters. They will not, however, extend coverage if this is a full-time summer job.

Progressive will not extend coverage on a personal car insurance policy though they will write a commercial policy for a delivery driver. In this case, the delivery driver needs to be on their own policy apart from anyone in the household who’d not a delivery driver. I quoted a commercial policy for my friend’s son, but the rate was more than $3,000 a year. That’s expensive coverage for someone making minimum wage and tips.

Aside from the expense of having appropriate insurance coverage for what many view as a part time job, there’s a very interesting question we should ask. What would happen if someone’s high school or college student were involved in an accident while delivering pizza to one of the shop’s customers? Would your car insurance policy cover the accident?

There’s no clear answer here. Some companies may cover it and then inform the client they will not cover a delivery driver in the future. They may cover the accident and then cancel the policy, or they could deny the claim leaving the driver and possibly the family to pay for damages on their own. None of these potential scenarios are great options and should serve as a red flag to any parent whose son or daughter wants to do this. The pizza shop owner suggested my friend’s son simply remove the sign from his vehicle if involved in an accident. This is insurance fraud and puts the young driver in a compromising position of being solely liable for whatever their insurance company decides.

My advice to any parent is to find out if your car insurance policy will cover your student before accepting the position instead of after an accident. What do you think? Share your thoughts, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

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