What Auto Insurance Covers for Pizza Delivery?

Written by James Hirby | Fact checked by The Law Dictionary staff |  

There are currently tens of thousands of part-time pizza delivery drivers employed in the United States alone. Most of these individuals are students who can barely afford car insurance. While pizza delivery can be a relatively lucrative operation in certain areas, most part-time pizza delivery drivers can hope to make just a few hundred dollars per week. A driver without a second job that pays significantly more than his or her primary occupation may put a substantial portion of his or her monthly pay towards the cost of auto insurance.

To make matters worse, most car insurance companies don't provide retail insurance coverage for delivery drivers. The few insurance companies that do provide such coverage often charge a substantial premium for doing so. If you tell your insurance company that you've been hired as a pizza delivery driver, you can expect to see your premiums rise by 50 percent or more.

Unfortunately, you're legally obligated to tell your insurance provider that you'll be using your personal vehicle to fulfill a commercial function. Failure to do so technically constitutes insurance fraud. This is a serious crime that's punishable by hefty fines, jail time and court-ordered probation. Nevertheless, most new pizza delivery drivers fail to inform their insurance providers about their new occupations. The added costs associated with making this revelation often seem too steep to justify it.

If you fail to tell your insurance provider that you've been hired as a delivery driver, you run the risk of losing your coverage at some point in the future. It's unlikely that your provider will find out immediately about your job switch. However, this information will be revealed as soon as you're involved in an accident while you're on the job. Even if the accident doesn't produce an official police report, the other driver involved is likely to report to his or her insurance company that you were working as a delivery driver when it occurred. Once your provider learns of this, they'll refuse to cover any costs associated with the accident and may nullify your policy on the spot.

To avoid having to pay thousands of dollars to cover the cost of future accidents, tell your insurance company about your new job and ask to switch to a commercial auto policy. Depending upon your state of residence and past driving history, this may cost between $1,200 and $2,000 per year.

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