DoorDash is one of the quickest ways for virtually anyone with a vehicle, a valid driver's license, and proper auto insurance to start earning some income. The company tries to steer clear of making any specific claims about how much money a driver can make since it can vary wildly based on numerous factors, but it has clearly been enough for the company to have attracted literally millions of contract delivery drivers to its platform. Given that you are reading this, you may also be interested in getting started with food delivery for DoorDash, and you might want to know what that means in terms of getting the proper driver car insurance to keep yourself covered. 

food delivery driver checking phone

What Type of Auto Insurance Do You Need to Drive for DoorDash? 

Before you rush out the door with keys in hand to start driving for DoorDash, keep in mind the fact that you need more than your private car insurance policy to drive for DoorDash. The company may not specifically check that you have added business 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 Drive For Doordash?

Yes! When you are using your car to drive for DoorDash (or any food delivery company), it is considered business. Remember:

  • Your personal car insurance policy does not cover business use of a vehicle. If you are driving for a delivery company, like Doordash, you're using your vehicle for business purposes instead of just for personal use. You're working with your vehicle and personal auto insurance policies do not cover you when you are doing food deliveries for Doordash
  • You can very likely get business-use coverage through your private insurance provider. However, you will need to call them ahead of time and let them know that you drive for DoorDash and are interested in adding business-use coverage to your policy. On the bright side, this additional coverage typically costs just a few extra dollars per month.

How Does Car Insurance Work with DoorDash? 

delivery driver delivering groceries

DoorDash carries coverage as well on all of the drivers that contract with them. Their policies cover up to $1 million dollars worth of bodily injury and/or property damage that occurs as a result of another driver colliding with you when you are on a delivery. You must be actively on 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 against accidents in which you are the at-fault party. The company is NOT going to step in and pay for damages that you cause while on a delivery with them. You will likely face the following consequences if you are in an accident while delivering for DoorDash:

  • Deactivation from the platform
  • The potential to have none of the damages covered (if you did not add business-use coverage)
  • Your insurance policy may be canceled or your premiums may go up
  • You may incur points on your driving record
  • You could be issued a traffic ticket

Needless to say, being involved in an accident is never ideal, but the consequences can escalate if you don't take care of important safeguards ahead of time. 

You may also be interested in reading:

What Are The Pros And Cons Of Getting Extra Insurance To Drive For DoorDash

Doordash driver giving food

All prospective 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 venture is the best way to determine how to proceed. 

Pros
  • You will know that you are covered by insurance in the event of an accident even if the accident was your fault
  • It costs just a few extra dollars per month for this peace of mind
  • You are supposed to carry business use insurance to participate as a DoorDash driver to begin with
Cons
  • Depending on the exact cost and the amount you earn on DoorDash, you may be losing money on this proposition
  • You may have to sign up for business use for a longer period of time than you ultimately end up driving for DoorDash

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

Does DoorDash Offer Insurance To Its Drivers? 

food delivery driver getting out the car

DoorDash does not directly have an insurance product that it offers to a food delivery driver. The company does provide basic liability insurance to cover drivers who are involved in an at-fault accident while they are on a delivery. However, that insurance is not about keeping the driver protected, it is about protecting the company from the potential for a lawsuit. 

As mentioned above, drivers are responsible for paying for their own business use auto insurance at all times if they want to retain full protection against any possible accident while driving for DoorDash. The company does not provide this service and does not offer it at this time. 

Affordable Auto Insurance That Can Keep You Protected While Working as a Delivery Driver

There are many auto insurance companies that will happily work with you to provide you with the quotes that you need as far as auto insurance is concerned. They want to win your business, and they know that many customers compare prices to find the best products. That is why there is a constantly ongoing pricing war between the major insurance providers throughout the country. Thus, 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 quoted as the yearly cost of state-minimum insurance, so you should add a bit to these for business use coverage, and more still if you want more comprehensive plans: 

graph of the average estimated rate for business use car insurance

You might look at those figures and think that it is abundantly clear that everyone should run to USAA to get their coverage. They might be a great brand to select, but it is NOT a guarantee that they are the one you should go with. They may not be available in your area, or they may not agree to provide coverage for your vehicles specifically. You have to look into some of these factors before deciding who you are going with. Shop around and see the specific quotes that these companies can offer you before determining who you are going with.

Do People Find Driving For DoorDash To Be Worthwhile? 

delivery driver getting out 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 types of considerations they should make. You do have to consider your costs when making your choice. 

These food delivery services often don't like to mention the costs that drivers must take on in order to participate in the program. They prefer to glaze over that because they know that it is information that drivers are not as thrilled about. That said, it is also extremely relevant given that each individual driver must decide for themselves if it is worth it. 

To make more sense of this, let's take a look at a typical example of what a driver might earn, and how those earnings might break down after all expenses are considered: 

  • Driver makes two deliveries per hour at an average price of $8.50 per delivery.
  • Driver earns $17 for the hour before expenses.
  • The cost of business use insurance adds $15 to their premium or approximately $0.50 per day.
  • It costs approximately one gallon of gas, per every three deliveries.
  • The price per gallon of gas is currently $4 per gallon.
  • Depreciation on the driver's car is $0.30 per delivery.
  • The need for more frequent oil changes breaks down to $0.25 per delivery made.
Doordash driver earnings calculation infographic

If you calculated all of that up and assumed that the driver did the work part-time (4 hours per day), you would see that although their earnings appeared to be approximately $68, the reality is that they only earned $52.43 after all of those expenses are taken out. That brings their hourly net profit down to $13.10 per hour instead of $17. 

All of that said, this does not necessarily mean that everyone should forgo driving for DoorDash. Truth be told, $13.10 per hour is a decent wage in many areas, and there are many ways to boost your earnings beyond the $17 per hour that we discussed in the example. 

There are plenty of people who have been doing this work for some time who make considerably more than that. Thus, it is fair to say that there are different ways to look at how lucrative DoorDash may or may not be for you specifically, and you should definitely check out how much you are able to earn for yourself before making a final decision. 

Final Thoughts

You should always purchase business use auto insurance if you decide to drive for any food delivery service. It is the least of your expenses when looking at the cost of operating as a food delivery driver, and it provides extreme value to you in the form of peace of mind about your driving record and ability to stay safe out on the roads. Just remember that you ought to commit yourself to stay in the food delivery game for quite some time in order to make the cost of the insurance worth your while.

Post ID: OyEEDxPBX Category ID: nMb7yA2

Comments0 comments

Your comment was sent and soon will be posted