For some people, the part-time job delivering pizzas in the family car is a rite of passage, a way to save money for school or to buy those extras the parents won’t spring for. What many of those people never knew was that it was likely that the family’s car insurance coverage would not cover costs if an accident occurred while Junior was working his pizza shift.
While his parents may not have considered the insurance implications of the pizza delivery job, they are real and substantial. Here are some things to consider about using the family car for commercial purposes.
Commercial Versus Personal Insurance
The average motorist in Canada likely uses their car to go to and from work each day. They buy groceries and run errands, visit friends and taking road trips. When looking at all the average motorists in Canada, insurance companies get a pretty clear picture of how personal vehicles are used, and insurance for those cars covers most situations.
Commercial vehicles, on the other hand, aren’t parked for the time the driver is at work, they are the workplaces. It’s a simple concept. The more a vehicle is on the road, the greater its risk of incident and insurance claim. For insurance companies, the risk is money. Commercial insurance coverage in the same amounts as a personal policy will cost significantly more due to that risk.
Pizza Delivery Insurance
When Dad tells his insurer that Junior is delivering pizzas, the insurance company will likely inform him that they will not cover any accidents that occur while the car is used for delivery. The company may even begin steps to cancel the policy if it is within their approved operating rules.
Some insurers do offer commercial endorsements for personnel policies, but these are geared toward jobs such as financial planners, people who may use their personal vehicles to visit a few job sites daily. That’s a drastically different usage pattern than pizza delivery requires.
Non-Owner Liability Insurance
Reputable pizza stores that hire drivers using their own vehicles should have something called non-owned vehicle liability insurance. This coverage protects both the driver and the pizza store from lawsuits arising from at-fault accidents and harm to other people or property. While this is a good start, it doesn’t protect you from repair costs to damages received while on pizza delivery.
Arranging Complete Coverage
For your budding pizza entrepreneur, the best you can do is determine what coverage his employer has. With non-owned vehicle liability insurance in place. Armed with this, you can then talk to your insurer about what additional coverage is needed to make sure your family wheels keep rolling.