Insurance for Delivery Drivers - What Do I Need?
Getting around town, do you sometimes feel like this guy – with no safety net? Picking up and delivering sounds simple. But it’s a risky business. Not just for you, but also for the people around you and the folks who depend on you to get the goods from here to there intact on time. Insurance is how you and everyone else stay protected. A4DD provides four basic kinds of insurance that arguably every delivery driver needs:
What's the Cost?
Each type of insurance has its own costs, and you can see cost estimates by clicking on any of the links above. Briefly, cargo insurance starts at just $3.50 per week. GL insurance runs a bit more. Occupational Accident insurance costs as little as $14.00 per week – a real bargain considering what it covers. Business auto insurance premiums vary quite a bit from place to place and depending on factors like your driving record vehicle type. For exact quotes, you need to be an A4DD member and apply. There’s no obligation to buy.
Is all this really necessary?
Consider the following factors and then make the right decision for you:
- Motor Carrier permit – You’ll need business auto insurance for this. Cars, vans, pickups and similar light vehicles need a $300,000 minimum liability limit while heavier vehicles should carry liability limits of $1 million (per occurrence). Some states, including IL and OR, also require $5,000 in cargo insurance.
- Contract requirements – Motor carriers increasingly expect their independent drivers to carry the same kinds of insurance as larger delivery firms. This could mean all four insurance types. Occupational Accident is the most common contract requirement, followed by Cargo and GL. Fewer require Business Auto insurance, in part because of the extra expense involved. The more insurance you can show, the more motor carriers you will qualify for work with and the more they will see you as a preferred business partner.
- The work – Regardless of what others require, consider carefully what it is you do and what kinds of risks you take. Insurance is the best answer for risks that are infrequent, unpredictable, and unaffordable. For example, if you spend little time away from your vehicle then perhaps GL insurance is not a big priority. Whereas, if you deliver and assemble baby cribs, then GL should shoot to the top of your list.
- Weighing risk – Different people feel differently about taking risks. Are you concerned about acting ‘penny wise, pound foolish’ and losing all you’ve worked for? If so, buy the insurance you need to feel protected. Perhaps instead you’re a ‘damn the torpedos’ type. You just want to minimize expense and maximize cash in your pocket. Then perhaps stick to what’s required.
- Cost – No doubt about it, cost is a factor. Sometimes, in order to get by you have to live without things you know you need. If so, set reminders for yourself to reevaluate your choices regularly. This way, when things get better you won’t forget to make changes before something happens and it’s too late.