Companies like Skip the Dishes are popping up all the time and most of them are linked to mobile device usage. They offer convenience, efficiency and a certain amount of accountability. Drivers and passengers rate and score everything. Delivery services are becoming popular with the new sharing economy. Uber and Lyft deliver people to their destinations. And now, Skip the Dishes and Uber eats deliver food from restaurants.
All of these options rely on regular people using their regular cars to deliver people or goods. Most of these drivers rely on their regular car insurance and as a result could find disaster down the road.
Personal Insurance for Personal Usage
Most people drive their cars to and from work, and then for pleasure. Retirees who have no daily commute will have cheaper car insurance as they perhaps don’t drive as much. Some business people use their cars for visiting clients and customers. They will have their car insurance rated for that kind of usage.
When a person accepts goods to deliver in their own car they are using their vehicle for commercial purposes. And if they only have insurance for personal use, such as commuting and pleasure (ie driving to shops, restaurants, movies, or visiting family and friends) they will likely see one or more of the following problems.
Related Read: You Will Pay More for Distracted Driving
If You Drive for Skip the Dishes and Don’t Tell Your Insurance Company What Could Happen?
The Insurance Company Voids Your Car Insurance Policy
An insurance company that finds out a person is delivering pizzas and only has personal use coverage consequently will void that person’s car insurance policy. An insurance company will get off risk with either a 15 day registered letter notice or a 5 day hand delivered notice.
The Insurance Company Cancels Your Car Insurance Policy for Material Misrepresentation
If the difference of what you say you do with the car and what you actually do is severe enough the insurance company could cancel the policy for material misrepresentation. Material misrepresentation is a formal phrase to indicate that what you use the vehicle for does not match the description of what you told the insurance company. Insurance companies will surcharge your insurance policy for years after the offence. Why? It’s because a Material Misrepresentation stays on your insurance record for years.
Your Accident Coverage is Denied
Imagine you’re driving your car in order to get a Skip the Dishes order delivered. Out of nowhere another car turns in front of you and you slam into the back of it. The damage to your car is extensive and you must get it towed. If you have the proper car insurance policy and the proper coverage in place there are no issues. Accidents happen. But, if you don’t have the proper commercial car insurance policy the insurance company will deny your claim. That means you have to pay for the repairs to your vehicle out of your own pocket.
What if you cause an accident where someone is seriously hurt? If you don’t have the correct car insurance you could therefore find yourself on the wrong end of lawsuit with no defence help from the insurance company.
Get the Right Coverage Right Away
Getting the right insurance coverage for how you use your vehicle is important. It does provide peace of mind because you know if the worst case happens you have the protection of your insurance policy.
Getting insurance for delivering food with your own car is important and at this time we have one option, Facility Association, which is a high risk and more expensive market. We offer car insurance for the province of Ontario only.
Want a second opinion on your commercial car insurance needs?Visit here.
Lackner McLennan and Erb and Erb create these informational articles with the intention of educating the public about insurance and investment related matters. This article does not substitute for broker advice regarding your specific insurance or investment needs. For a comprehensive strategy to tackle what you, your family, or your business, may need we invite you to speak directly to a broker who can guide you through all the options available to you.