Personal Insurance for Personal Usage - Jul. 27

Personal Insurance for Personal Usage

Companies like Skip the Dishes are popping up all the time and most of them are linked to mobile device usage. They offer convenience, efficiency and a certain amount of accountability. Delivery services are becoming popular with the new sharing economy. Uber and Lyft and deliver people to their destinations.

And now, Skip the Dishes and Uber eats deliver food from restaurants. All of these options rely on regular people using their regular cars to deliver people or goods. Most of these drivers rely on their regular car insurance and as a result could find disaster down the road.

If you Drive for Skip the Dishes or Deliver Pizza using your own vehicle and don’t tell you insurance company.

*What could happen?

Most people drive their cars to and from work, and then for pleasure. Retirees who have no daily commute will have cheaper car insurance as they perhaps don’t drive as much. Some business people use their cars for visiting clients and customers. They will have their car insurance rated for that kind of usage. When a person accepts goods to deliver in their own car they are using their vehicle for commercial purposes. And if they only have insurance for personal use, such as commuting and pleasure (i.e. driving to shops, restaurants, movies, or visiting family and friends) they will likely see one or more of the following problems.

 *The Insurance Company Voids Your Car Insurance Policy, an insurance company that finds out a person is delivering pizzas and only has personal use coverage consequently will void that person’s car insurance policy.  The insurance company will get off risk with either a 15-day registered letter notice, or a 5-day hand delivered notice.

*The Insurance Company Cancels Your Car Insurance Policy for Material Misrepresentation

If the difference of what you say you do with the car and what you actually do is severe enough the insurance company could cancel the policy for material misrepresentation.

Material misrepresentation is a formal phrase to indicate that what you use the vehicle for does not match the description of what you told the insurance company. Insurance companies will surcharge your insurance policy for years after the offence.

Why? It’s because a Material Misrepresentation stays on your insurance record for years.

*Your Accident Coverage is Denied

Imagine you’re driving your car in order to get a Skip the Dishes order delivered. Out of nowhere another car turns in front of you and you slam into the back of it. The damage to your car is extensive and you must get it towed. If you have the proper car insurance policy and the proper coverage in place there are no issues. Accidents happen. But, if you don’t have the proper commercial car insurance policy the insurance company will deny your claim. That means you have to pay for the repairs to your vehicle out of your own pocket.

What if you cause an accident where someone is seriously hurt? If you don’t have the correct car insurance you could therefore find yourself on the wrong end of lawsuit with no defence help from the insurance company.

Getting the correct coverage.

Getting the right insurance coverage for how you use your vehicle is important. It can provide peace of mind because you know if the worst case happens you have the protection of your insurance policy. Getting insurance for delivering food with your own car is important, talk to your insurance company to find out what options you have for commercial auto insurance.

Anyone using a car for commercial purposes requires commercial car insurance in Ontario. That’s simple enough. Where problems arise is that the cost of commercial auto insurance can easily outspend the money earned on a part-time basis.


The main issue is the increased risk experienced when a vehicle drives more kilometers.

More driving means the likelihood of an accident increases too. For insurance companies, increased risk means that their chances for paying additional costs in accident settlements and repairs goes up. When that happens, drivers pay more.

The need for commercial insurance is not restricted to food delivery vehicles.

Passenger services in personal vehicles — Uber, for example — require coverage beyond what a personal auto policy provides. It’s one reason that the taxi industry is up in arms over the services. Friends who charge money to drive you to the mall etc. or give you driving lessons. Anytime someone uses a personal vehicle commercially without arranging appropriate coverage, they operate with an unfair advantage. On top of that, they are operating illegally.

Vehicle insurance is a contract between insurance company and the vehicle owner. 

An insurance company doesn’t honour personal policies for incidents occurring while food delivery use occurs. This means that the company has no financial responsibility for an accident or theft. The owner and driver may be fully responsible for not only repairing and replacing the vehicle but paying settlements for any lawsuits arising from the accident. Considering settlements against at fault drivers can exceed $200,000, there is a serious financial load at stake without proper insurance.

Without insurance coverage, a car can’t use Ontario roads.

Driving without insurance carries stiff fines ranging from $5,000 to $50,000. A food delivery driver operating without commercial coverage may be considered driving without insurance at all, even with a personal policy in place.

There are no differences for drivers of motorized vehicles requiring licensing in Ontario, as part of the ownership and licensing process for motorized vehicles requires proof of insurance.

That insurance must reflect accurate use of the vehicle or similar difficulties arise.


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