- Motorists must upgrade their vehicle insurance to include hire & reward (H&R) cover if they want to get a job making deliveries with their car, even a part-time job. The classes of use most common for personal cars (social, domestic & pleasure, commuting, and business use) are not sufficient – delivery drivers also need H&R cover.
- However, it’s not easy for drivers to add H&R cover, because the largest UK car insurance companies won’t cover delivery driving themselves, nor will many accept top-up PAYG cover (e.g., Zego). Our latest study shows which major car insurers will accept top-up H&R cover, and which won’t.
- As a result, many motorists wanting to use their car for delivery work have to cancel their existing car insurance, incurring cancelling fees, and switch to specialist courier insurance that covers both their personal and delivery driving.
- In many cases, car drivers end up paying 4-5X more for insurance to cover both their personal and delivery driving (the increase is not as extreme for van drivers).
A NimbleFins investigation has shown that some of the UK’s big name car insurance providers will not offer insurance policies to couriers and delivery drivers who use their cars for work, due to the additional risks of delivery driving.
Although new insurtech brands like Zego specialise in courier policies, the PAYG, app-based model hasn’t quite gone mainstream yet. But that’s annoying because many people with regular day jobs also like the idea of doing some food delivery at weekends to earn extra cash.
This could mean that someone driving for a company like Deliveroo, JustEat, UberEats or Amazon involved in an accident could find their insurer refusing to pay out, leaving the driver in a potentially devastating financial situation. It also means they might be driving illegally.
The problem for drivers, explained by NimbleFins:
Growing numbers of workers left at risk
With the accelerating shift towards online deliveries during the Covid-19 pandemic, a growing number of workers will be affected by the lack of insurance on the market. All delivery drivers and couriers who are using their personal car for making deliveries must have a special type of commercial insurance called Hire & Reward (H&R), which the insurers view as specialist cover. Drivers also need to inform their car insurer of their delivery or courier job. Not doing so leaves a driver in breach of their car insurance contract. However, getting properly insured will not be easy, as there’s a severe lack of straight-forward insurance options for delivery drivers on the market.
Largest insurers ruling out solutions
NimbleFins queried the UK’s largest 10 car insurance companies, and found that none will cover courier or food delivery work. This means that drivers already in possession of a Social, Domestic and Pleasure (SD&P) car insurance policy with the likes of Admiral or LV who start using their car to deliver parcels, food or more could be driving uninsured and risk voiding their policies entirely. There is a product on the market called top-up Hire & Reward (H&R) insurance, which in theory, could supplement an SD&P policy to cover delivery driving.
However, we asked the TOP 10 insurers if they’ll permit their SD&P policyholders to buy top-up H&R, and only 4 have confirmed that this is acceptable: Admiral, RSA (More Than), Direct Line, Hastings and Ageas. Drivers insured by the other large insurers could have their underlying policies invalidated if they were to buy top-up H&R cover and drive as a courier or delivery driver.
Why don’t the big insurers cover delivery driving?
“Car insurance companies are generally nervous about insuring delivery drivers,” explains the CEO of market research company NimbleFins, Erin Yurday. “Delivery drivers are often on tight time frames, potentially rushing to meet an agreed delivery slot. Plus, they regularly venture down unfamiliar roads guided, and sometimes distracted, by an app on their device. They also frequently stop on busy roadsides to collect and deliver food and parcels,” adds Yurday. The risks are high, which means higher odds of accidents and insurance pay-outs.
What’s left to do for drivers?
There isn’t necessarily a simple solution to this problem. The best thing drivers can do is to talk to their insurers before taking out a Courier insurance policy. A recent study by NimbleFins explains the options for drivers further if their current provider won’t offer H&R cover.
Apart from Zego, IE magazine also found that Acorn Insure, Insurance Revolution, Principal, Peacock Insurance, Quotezone comparison site and about 30 other brokers all offer it. Plus Qover are offering courier insurance in Scandanavia, after a deal was announced recently. Concirrus are working hard to create a new car insurance underwriting and pricing playing field, forging a series of partnerships with brokers and MGAs. The Concirrus approach is to underpin risk using real-time, app-based data, rather than postcodes, occupation and driving history.
ThingCo are also pioneering telematics based car insurance, which has a spin-off benefit for those who want to do part-time delivery work – the ThingCo Theo gadget is inside the car, so the insurer knows the risk, every hour of every day.