Does Postmates Have Insurance for Delivery Accidents? Insight from the Best Food Delivery Accident Attorneys
As the demand for having food delivered right to your door has gone up, especially during the coronavirus emergency, so has the demand for drivers to make these deliveries. Just like the ridesharing business, companies like Postmates have attracted millions of drivers across the country to work for them delivering food due to the possibilities of setting up their own work schedule, quick turnaround for payment, and not having to deal with riders getting into their personal vehicles.
According to data collected by Second Measure, meal delivery services saw year-over-year growth of 24 percent collectively through the end of March 2020. Postmates is the most popular food delivery service in Los Angeles, followed by DoorDash and Grubhub.
But just because you have your own car and pay the insurance every month doesn’t mean you’re good to go to work as a food delivery driver. Sure, your personal insurance would suffice to sign up for these independent contractor gigs, but in the event of an accident — like a car crash— you would probably end up getting the short end of the stick, since your insurance most likely wouldn’t cover it.
Since doing these types of jobs requires an additional commercial or business-use policy, your personal insurance most likely won’t cover any damages. And since these companies don’t usually cover their independent contractors, you’ll end up with the short end of the stick.
In order to work for companies like Postmates, drivers need a personal auto insurance policy that covers the commercial use of a car. The rates for business use of a car are significantly higher than the ones for personal use, and that is because the risks of being on the road increase due to:
- The frequency of driving
- The time spent driving
- Where one drives
- The distraction issues related to keeping an eye on the order and the navigation
Commercial and business-use policies are designed to cover the risks when you use your personal car for commercial uses. Food delivery services are still a novelty, and the insurance industry is still adapting to the changes. That’s why it’s very important to check with your current insurance carrier on what your options are in terms of coverage if you’re considering working as an independent contractor for food delivery services.
Even if you do it only part time, driving for Postmates is a commercial activity because you are using your car for business purposes. If you have an accident while you are online in the app, your insurance will probably not cover it given you used your vehicle for commercial purposes.
Postmates requires all on-demand drivers to maintain an up-to-date, personal automobile liability policy on all vehicles operated while driving for the company with insurance limits equal to or greater than the minimum requirements for the state where their independent contractors drive in. “Property damage sustained to your property in an accident are [the driver’s] responsibility and should be addressed by your personal insurance carrier,” their website explains.
The company provides $1 million in excess liability to third party claims that will only come into play after the driver’s personal auto insurance coverage has been exhausted. Moreover, their recently provided Occupational Accident Insurance covers medical and lost income with an amount up to the policy limits. The insurances covers the following benefits and protections:
- Accident medical expense: to a maximum of $1,000,000 (with no deductible or copay)
- Accidental death benefit: to a maximum of $100,000
- Survivors benefit: to a maximum of $100,000
- Temporary total disability: to a maximum of $500 a week in on-demand services replacement earnings
- Permanent total disability: to a maximum of $500 a week in on-demand services replacement earnings
- Accidental dismemberment: to a maximum of $200,000
However, it doesn’t cover accidental death or if you’re 65-years-old or over (yet, survivor’s benefit, accidental dismemberment and paralysis benefits are reduced).
It must be noted Postmates will only cover the damages if the driver was on an active delivery, meaning after they selected “accept” on the platform and until the customer receives their order as logged by the platform. If you are in mode off, your personal insurance is your insurance policy. If you are online but you haven’t accepted a delivery request, again, your personal insurance is your insurance policy.
As EntreCourier highlighted, “Most personal car insurance policies will not cover you in an accident while you are logged on to do delivery work for a third party app. That means that your insurance won’t cover you, and Postmates won’t cover you. Be very clear on this: if they are able to identify that you were logged in, not just on an active delivery, they will not cover any claim. If you are delivering for Postmates you need to make sure you have insurance that covers you.”
Yes, business-use add-ons and commercial insurance can be expensive. And though Postmates does a better job than other food delivery companies, it is essential that drivers ensure that they’re covered properly in case of an accident. Injuries and property damages resulting from car accidents can easily rack up, and you don’t want to end up having to cover it all on your own just because you weren’t properly informed on the insurance you needed while delivering food for Postmates.