A lot of people are seeking extra income nowadays to help make ends meet or to get out of debt.  Dave Ramsey is a big proponent of getting out of debt and he encourages his listeners from his nationally syndicated radio program to seek a second job to get out of debt.  One of the jobs that I have heard him recommend is delivering pizzas.  The extra income may be a good idea to help out with the bills, but the delivery activities could create a serious problem with your auto insurance and cost you big bucks. 

Both the ISO Personal Auto Policy and the Texas Department of Insurance Personal Auto policy contains a similar exclusion, "We do not provide coverage for any insured for that insured’s liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance."

This exclusion means that if you are using your car to make deliveries and or carry passengers for a fee, you do not have any insurance coverage. Therefore if you are using your personal auto to deliver pizzas, chicken wings, sandwiches etc., the insurance company could deny the claim and you will have to pay for Property Damage Liability and Bodily Injury to a third person as well as collision damage to your auto out of your own pocket.

The only sure way to be covered for the aforementioned damages is to purchase a Commercial Auto policy.  Of course, this will cost you more money, maybe even twice as much.  However, if you are going to use your car in a business, you need to have the right insurance policy to cover potential accidents. So consult your insurance agent and let them know about the delivery activities. 

And do not look to the pizzeria’s auto liability policy to protect you.  While most reputable restaurants have Business Auto Insurance including Hired and Non Owned auto, the restaurant’s insurance only protects the business and does not protect and defend you unless you are driving a vehicle owned by the restaurant.

If you or your teenager delivers food, newspapers, auto parts or other goods for a fee using a personal auto policy, you could incur some serious liability without any insurance protection.  And what is more, your auto insurance could get cancelled.   

Contact Jim Porter (972) 234-5588 Read more articles by Jim