3/30/2018 By Agent Ken CobbBy Agent Ken Cobb
When I was in college in the late 90s, I decided a great way to make some extra money would be to deliver pizza on the weekends for the local Pizza Hut. I did this for several months – until my old vehicle started having car trouble from the extra usage – blissfully unaware that I might be voiding coverage under my personal auto policy.
I should clarify that not all personal auto policies directly exclude delivering pizzas, newspapers, mail or other products. Standard (ISO) personal auto policies only exclude “public or livery conveyance”, which has often been interpreted to mean that you aren’t covered if your vehicle is available for hire to the general public (for example, Uber, taxis, sight-seeing vans, package delivery services, etc.) So if your Auto policy features this language, you might be covered delivering pizza for a restaurant, but it could depend on how your claims adjuster interprets your insurance policy.
Unfortunately, not all policies use this standard language. For example, one of America’s largest personal auto insurers excludes any coverage while your vehicle is being used for “retail or wholesale delivery, including, but not limited to, the pickup, transport or delivery of magazines, newspapers, mail or food”*.
What this means is that if you are insured with this carrier (and many people are) and you get into a car accident while on your newspaper route or on a pizza delivery, your Auto policy may not cover hardly anything related to the accident.^ So if the accident is your fault and someone else is seriously injured and sues you, no coverage. If there is major damage to someone else’s vehicle, no coverage. If there is major damage to your own vehicle, no coverage under your policy. This could leave you at risk of a financially catastrophic loss if you were sued as a result of this accident.
Before you begin a job delivery pizza, newspaper, mail or any other product with your vehicle, you should first carefully review your insurance policy contract to determine if you will be covered if you do so. Failure to accurately complete this step could result in an extremely unhappy surprise if you get in an accident en-route.
But that’s not all. Even if your personal auto policy doesn’t clearly exclude delivery, this doesn’t mean that your insurance carrier is willing to insure your vehicle used this way. Typically, personal auto carriers consider regular delivery use to be a higher risk that they simply aren’t comfortable with. So when you apply for an insurance policy, this will likely be one of the questions asked. If you admit that you use your vehicle for delivery, they probably won't sell you the personal auto policy. However, if you fail to disclose this when asked and then get in an accident later while delivering, you could find your claim being denied for material misrepresentation, leaving you personally on the hook for all the damage and injuries.
The bottom line is that if you have a personal auto policy, your insurance company is assuming that you are using it for personal use. Delivery is not personal use, and if you do deliveries in your personal vehicle, your best bet is to buy a commercial auto policy instead. You'll probably pay a bit more to insure your vehicle on a commercial policy, but you can have the peace of mind knowing that you are properly covered.
*Form 9611A MN (02/16) version 2.0 (exclusion found in Liability to Others, Uninsured/Underinsured Motorist and Damage to A Vehicle policy parts). ^This exclusion is not found under the Personal Injury Protection part of this cited policy.
About the Author
Agent Ken Cobb
Ken is the owner and principal agent at Pine Country Insurance in Bemidji. Active in the insurance industry since 2000,Ken uses his years of personal insurance knowledge and experience to assist clients in customizing insurance coverage to fit their needs. Ken considers himself a "farmer" rather than a "hunter"; rather than focusing on writing a lot of new policies as quickly as possible, he works on cultivating long term relationships based on trust with his clients. When writing new policies and meeting for annual reviews, Ken spends time with his clients explaining and helping them understand their insurance, and he is also pleased to share his knowledge with his blogging audience as well.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.