Pizza delivery is a time honoured part-time job for many young drivers. Borrowing the family car a couple nights a week as a way to earn spending money may seem like a quick and easy way to turn driving skills into cash, but there are some things to address. Personal insurance doesn’t cover commercial use under normal circumstances. Without commercial coverage, any incident that occurs while the car is on pizza duty may not be protected. Here’s what you need to know if you have a delivery driver in the family.
Adding Commercial Insurance to a Personal Vehicle
Insurance companies do provide extra protection for personal vehicles used for business. This additional coverage is added through endorsements, also called riders. Typically, someone who calls on clients in their home, such as a real estate agent or investment advisor, adds this coverage to their own car. Delivery is another matter. From the insurance company’s perspective, a real estate agent drives to a home and remains there for a period of time. A pizza delivery takes only a few moments. The amount of time driving is comparatively more for the delivery.
On the other hand, a pizza delivery driver is more likely to work part-time, so the total amount of time on the road is less. This may keep additional coverage down in price. Pizza delivery is often a late-night job, and hours driven after midnight are more of a statistical risk. This is a factor that can increase insurance prices. The youth and inexperience of a teen trying to obtain a commercial endorsement may also be a factor that drives up costs and availability.
Each insurance company has its own underwriting rules. In Ontario, these rules must be followed as directed by the Insurance Act. If a company’s rules prevent it from issuing a commercial endorsement, then it cannot make an exception. It must not issue the policy. Finding a company that does issue commercial endorsements may be difficult. An insurance broker may be your best option to locate a provider in the regular car insurance market.
Do Pizza Stores Carry Insurance?
A reputable pizza restaurant offering delivery service should have a liability policy to protect itself from damages caused by an incident with one of its drivers. This coverage will not, however, provide protection against damage or loss to a driver’s personal vehicle. Pizza restaurants with their own fleet of delivery vehicles should have commercial insurance in place.
Consequences of Delivering Pizza Without Insurance
Expecting personal insurance coverage without adding commercial endorsements could be a recipe for disaster. If an insurance company investigation determines that a personal vehicle was being used for commercial purpose, the company may deny settlement payments. While provincial heath coverage would handle emergency services and basic care, extended medical and rehabilitation costs would fall on the driver. Liability for any at fault accident would remain solely on the driver. In the case of a serious accident, this could cost into the hundreds of thousands of dollars.