Do You Need Postmates Auto Insurance? [2021 Guide] - Paul Eisenstein

Thousands of people have begun making on-demand deliveries for Postmates as a full-time job or to generate a little extra cash. While this can be a lucrative endeavor, you may want to consider Postmates auto insurance to protect yourself and your vehicle.

Below, we’ll answer common questions about Postmates auto insurance. We’ll also give our expert opinion on some of the largest insurance companies in the nation. If you would like to go ahead and start getting free quotes for your vehicle, enter your zip code below.

Postmates Auto Insurance: What You Need to Know

Many drivers do not realize that their personal insurance policy does not cover them while they are making deliveries for Postmates and other companies. As the name implies, your “personal” auto policy only covers you while you are using your vehicle for “personal use” activities.

When you begin using your vehicle to generate revenue, a standard policy will no longer offer adequate protection. While it will still cover accidents that occur while you are driving to the store or going to pick up a friend from the airport, a standard policy will not protect you from any delivery-related incidents. When you’re making official deliveries with your personal vehicle, you fall into the same category as independent contractors.

This means that if you plan to drive your personal vehicle for work-related activities, you may want to consider a special insurance policy. You have several options, including a commercial auto policy or rideshare insurance.

With the surging popularity of on-demand delivery apps like Postmates, many major insurance providers have begun to offer rideshare insurance as an add-on option. For example, companies like GEICO, State Farm and Progressive will often allow you to upgrade your existing policy for an additional fee. This option makes it easy to get the protection you need.

Does Postmates Provide Insurance for Drivers?

Technically, Postmates does provide insurance for its drivers. However, the coverage is minimal. Specifically, Postmates offers what is known as “occupational accident insurance.” This insurance provides benefits for disability, medical bills, death, dismemberment and survivor payments for any injury that is caused during an active delivery.

On its website, Postmates explains that this coverage active from the time you “accept” an order until you drop it off at the customer’s doorstep.

Postmates offers this type of coverage in every state except California. The state of California requires Postmates to provide drivers with injury protection insurance. The coverage is similar to the occupational accident insurance described above, but the specific limits and payout amounts vary slightly.

As you can see, Postmates does offer its drivers some protection. Unfortunately, this basic protection does little to protect your vehicle and is primarily focused on medical expenses that relate to a catastrophic car accident. If you are involved in a crash that renders your vehicle totaled, Postmates insurance will not help to cover the repair costs. If you do not have proper auto insurance coverage, then you will likely have to pay out of pocket for repairs.

Do I Have to Disclose that I Am Driving for Postmates?

You must disclose your driving activities to your insurance provider. If you are involved in a car accident while making an official Postmates delivery, you must be truthful about the circumstances surrounding the crash. Lying to your insurance company in an attempt to receive benefits is a form of insurance fraud.

Even if you are not involved in an accident, it is important that you tell your provider that you are working for Postmates. If your provider finds out that you are making deliveries, the company may drop your policy altogether. The best approach is to speak with an insurance agent and find out what type of on-demand delivery coverage the company offers.

Auto Insurance Requirements for Postmates Drivers

Postmates requires that all drivers maintain valid auto insurance. When you’re applying to work for Postmates, you must submit a current insurance card.

Before you begin making deliveries, you should consider upgrading to commercial insurance or rideshare coverage. Without it, you will be left unprotected in the event of an at-fault accident. As discussed above, your insurance company can drop you if it is discovered that you are making deliveries for Postmates without proper coverage.

When you’re searching for Postmates auto insurance, you will have a choice between commercial coverage or specialty food delivery insurance. A commercial policy is more comprehensive and offers maximum protection, but it is more expensive than traditional coverage.

Ridesharing or food delivery insurance can be very cost-effective. It will provide you with round-the-clock protection whether you are making deliveries or using your vehicle for personal enjoyment. The coverage limits will also be lower than commercial coverage.

No matter which option you choose, you can reduce your overall costs by opting for a higher deductible. Your provider may also offer discounts, which can lower your premium.

Our Recommendations for Auto Insurance

Now that you know how important it is to have Postmates auto insurance coverage, it is time to find a reputable provider. As noted above, our experts have reviewed industry leaders so that you can buy with confidence. We have analyzed companies like USAA, Progressive and Nationwide to find out which providers offer the best rates and customer experience.

During our industry-wide review, GEICO and State Farm set themselves apart when it came to rideshare coverage. Read on to find out what our experts had to say about these two industry giants, or enter your zip code to start getting free quotes from multiple insurers in your area.

GEICO: Best Overall

For decades, GEICO has been known as one of the premier insurance companies in the nation. The company earned our top spot among major insurance providers and received a total score of 9.5 out of 10.0 in our review. The auto insurer offers a variety of discounts and plan options. Whether you need full coverage car insurance or basic bodily injury and liability coverage, GEICO has options.

State Farm: Best for Student Drivers

During our review of the market’s top insurance companies, we rated State Farm as the best choice for student drivers. State Farm offers grade-based discounts, flexible plans and more. The insurer has ridesharing and delivery service coverage for drivers looking to earn some cash by delivering for companies like Postmates, Uber Eats and Doordash.

FAQ: Postmates Auto Insurance

How does Postmates work?

Postmates is an on-demand delivery service. Drivers are paid a base fee of $1.35 per order. They are paid per-minute rates for waiting on orders and per-mile rates for deliveries. Customers can also leave a tip, which will be paid out to the driver.

Do you need special auto insurance coverage as a delivery driver?

Yes, both rideshare and delivery drivers need special auto insurance coverage if they want to be covered while working. Without it, your insurance company will likely deny a claim if you are involved in an accident while making deliveries. Your insurer might even drop your policy altogether if you fail to disclose that you are working as a delivery driver.

Does working for Postmates raise your auto insurance rates?

Working for Postmates will not automatically raise your insurance rates. However, upgrading to rideshare coverage will result in higher premium payments. The reason for this price hike is because your risk of being involved in an accident increases when you spend more time on the road.

What do I do if I get into an accident while delivering for Postmates?

Postmates requires you to defer to your personal liability policy if you are involved in an accident while making deliveries. After you have addressed any immediate medical issues and other concerns, you should then email Postmates to notify the company that your accident occurred during an active delivery.

Methodology

The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, pricing, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.

We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.

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