What Car Insurance Do You Need for Postmates?

Last Updated on June 2, 2021

If you drive for Postmates, then you may need special auto insurance. Postmates requires drivers to carry insurance. However, your ordinary personal auto insurance policy does not protect you when driving for Postmates.

Postmates provides basic insurance coverage to drivers. To complement this coverage and fill in gaps, many drivers buy a business-use or commercial auto insurance policy that covers work-related uses.

Confused about Postmates auto insurance requirements? Looking for the best car insurance for Postmates? Keep reading to discover everything you need to know about Postmates auto insurance requirements.

Table of Contents:

Ordinary Car Insurance Does Not Cover Postmates Trips

Most drivers have a personal car insurance policy on their vehicle. This policy covers you when driving for normal purposes – like when commuting to work or driving to the grocery store. However, an ordinary car insurance policy does not cover work-related trips – like Postmates, Uber Eats, or DoorDash deliveries.

When you work for Postmates, you’re using your personal vehicle for business purposes. You’re fulfilling delivery requests for customers in exchange for payment. You’re no longer driving your car for personal reasons. You’re driving it for business purposes.

Your personal auto insurance policy covers you up to the minute you start driving your car for business purposes. Once you’ve started driving for work purposes, you need to buy a commercial or business-use auto insurance policy. Postmates also covers you when picking up food and making deliveries, although it does not cover you when waiting for a pickup request.

Contact Your Insurer to Add Postmates Coverage

The easiest way to ensure you have valid Postmates insurance coverage is to contact your insurance company. Tell your insurer you’re driving for Postmates.

If you drive for Postmates full-time, then your insurer may require you to buy a commercial insurance policy. If you drive for Postmates part-time, then a business-use policy should cover you.

Some insurance companies have special rideshare or food delivery auto insurance. Uber, Lyft, Postmates, and other rideshare-like services are popular, and insurers have added insurance products to match.

For a few extra dollars per month, your insurer could add commercial coverage to your policy, protecting you when driving your vehicle for business purposes. Alternatively, your insurer could have a specific insurance product for Postmates drivers.

Car Insurance Options for Postmates Drivers

As a Postmates driver, you have three options for car insurance, including:

Commercial Policy: Commercial policies provide complete coverage for your work vehicle. If you use a truck for your construction company, for example, then you would buy a commercial policy for that truck. Any accidents you encounter when driving your truck for work purposes will be covered. Commercial policies are more expensive than business-use policies.

Business-Use Policy: A business-use policy is the right choice for some Postmates drivers but not others. A business-use policy covers drivers who use their vehicle for some business use and some personal use. If you drive for Postmates as a part-time gig, then a business-use policy should provide adequate coverage. However, if you are a full-time Postmates contractor, then you might not qualify for this coverage.

Personal Auto Insurance Policy: Your personal auto insurance policy covers commuting, personal trips, and other ordinary trips. Your personal auto insurance policy will not cover you when driving for Postmates or any other delivery service.

Contact your insurer to see which option is the best for you. Some insurers are more flexible with business-use policies than others, while others require a commercial policy.

What Does Postmates Insurance Cover?

Postmates, like Uber and Lyft, provides drivers with basic protection in some situations. If you’re driving for Postmates, you are partially insured through Postmates’ commercial insurance policy. This insurance extends to you whenever you’re driving for Postmates:

  • $1 million of bodily injury and third-party liability coverage

Postmates insurance covers any injuries or property damage suffered by third parties when you’re making deliveries. It’s a general liability insurance policy similar to the one on your car. You get up to $1 million in coverage.

This coverage does not protect your own vehicle. It only covers other people. If you damage your own vehicle in an accident, then you must make a claim through your own insurer to cover that damage. If your insurer denies your claim, then you need to pay for repairs out of pocket.

Overall, Postmates insurance functions similar to liability insurance, protecting you when driving for Postmates. When driving for Postmates, you have up to $1 million in coverage for damages you cause to other people.

However, there’s a big drawback to Postmates car insurance: it doesn’t cover all drivers in all situations.

When Does Postmates Insurance Cover You?

Postmates insurance covers you from the moment you accept a delivery to the moment you drop it off.

It does not cover you when sitting in your vehicle waiting for a delivery. If you are sitting or driving in your vehicle waiting to accept a delivery, then Postmates does not cover you.

It also does not cover you after you drop off an order. If you just dropped off an order and are waiting for a new notification, then you are not covered by Postmates’ policy.

Your insurance company considers this a business-related trip. You’re in your vehicle waiting for a delivery notification. However, Postmates does not cover you. That’s why there’s a gap in coverage. Your personal auto insurance policy does not cover this gap, nor does Postmates. That’s why you need supplemental coverage.

What Happens If I Don’t Tell My Insurer I Drive for Postmates?

Many Postmates drivers don’t tell their insurer they drive for Postmates. They continue driving with their ordinary car insurance policy and avoid paying higher rates. However, this is risky. If you get into an accident, your insurer can deny your claim.

Let’s say you drive for Postmates. You’re making a delivery one evening. You collide with another vehicle at an intersection because you were looking at the Postmates app waiting for your next delivery notification. You’re at fault for the accident. You did $10,000 worth of damage to the other vehicle, and the other driver must go to the hospital, where he pays $50,000 in medical bills. Normally, your car insurance policy would cover all of these expenses. However, because you were driving for Postmates at the time of the accident, your insurer denies your claim. You must pay the $10,000 of car damage and $50,000 of medical bills out of pocket. Because you weren’t making a delivery at the time of the accident, Postmates does not cover you.

Insurers can and will deny claims. If they suspect you have committed insurance fraud or lied, the insurer will investigate the claim, and they could deny your claim because of insufficient coverage.

What to Do After an Accident When Driving for Postmates

If you get into an accident when driving for Postmates, then you report the accident to your insurance company. Any physical damage is your responsibility, and your insurer should cover any damage caused by a covered event.

After reporting the accident to your insurer, you take a different approach depending on whether you were driving for Postmates or driving on your own during the accident:

  • If you were involved in an accident while on an active delivery (i.e. after selecting ‘Accept’ through the Postmates app and until the customer receives their order as reported by the Postmates app), then email Postmates (at protection@postmates.com) with the relevant details.
  • If you were involved in an accident at any other time (when not picking up or delivering Postmates to a customer), then do not report the accident to Postmates.

Postmates considers drivers to be independent contractors. Any physical damage sustained to your vehicle is your responsibility. Make a claim through your insurance company to ensure you are covered.

Postmates Car Insurance Requirements

Postmates requires drivers to carry car insurance that meets or exceeds the minimum insurance requirements in your state. In other words, Postmates has the same auto insurance requirements as your state.

Postmates provides commercial insurance when driving for the company. The Postmates insurance policy covers drivers after they accept a delivery and until they deliver food to the customer.

Postmates does not require drivers to carry collision or comprehensive coverage, nor does the company require a commercial auto insurance policy. As long as your insurance meets or exceeds your state’s minimum requirements, you are complying with Postmates’ car insurance requirements.

Final Word on Postmates Insurance

As a Postmates driver, your ordinary insurance policy does not cover you. Although Postmates provides $1 million in insurance coverage to all drivers, this coverage only applies when making a delivery. It does not cover you when waiting for a pickup notification.

Contact your insurer to ask about a business-use or commercial insurance policy. If you don’t add business-use or commercial coverage to your policy, then you risk paying out of pocket for your next accident.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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