As U.S. states attempt to combat the coronavirus outbreak by closing stores and restaurants, owners of such businesses and workers who have been sent home have started making deliveries to maintain income and serve their local communities.
While these delivery services are needed, they can have unforeseen insurance consequences, for the delivery drivers especially.
Employees and others have begun making deliveries using their own personal vehicles. Such workers are typically covered only by their personal automobile policies. Personal auto policies normally fail to provide coverage if the vehicle is used for a commercial purpose. This leaves drivers who are working under trying conditions without coverage should an accident happen while they are making a delivery. Some state regulators are moving to address the issue.
Wisconsin’s Department of Insurance has taken a lead in recognizing that delivery drivers working in response to the outbreak should not be denied coverage for accidents that happen while making deliveries. It has required insurers to provide coverage under a personal auto policy while the insured is making deliveries. State Commissioner of Insurance Mark Afable issued an order prohibiting the denial of any claim for a policy in effect on or after March 17 solely because the insured was delivering food on behalf of a restaurant impacted by a restaurant closure. The order allows insurers to choose to provide retroactive coverage. Drivers with delivery coverage under their own or another policy or through a transportation network company or delivery company are not required to be covered by this order.
Two other states have asked insurers to provide similar protection to delivery drivers but have not mandated it. Commissioner Jon Godfread with the North Dakota Insurance Department issued a bulletin on March 25 asking insurers to provide coverage for insureds delivering food, medicine and other essential goods. As with Wisconsin, insurers can choose to make coverage effective March 25 or retroactive to March 17, and coverage is not provided to deliver drivers who have delivery coverage under their own or another policy or through a transportation network company or delivery company.
In Oklahoma, while not requesting insurers to take action, Insurance Commissioner Glen Mulready issued a press release on March 26 recognizing Allstate Insurance Company for easing restrictions on their personal auto policies for insured customers making deliveries. Mulready encouraged other insurers to find “innovative solutions” for insureds.
Over just the last few days, more states are issuing bulletins concerning delivery drivers. These new bulletins all recommend insurers expand coverage for personal vehicles but do not require it. In a bulletin issued March 30th, Commissioner Jim Ridling with the Alabama Insurance Department recommends insurers consider expanding coverage for personal vehicles delivering food, medicine or other essential services for commercial purposes.
This same day, Commissioner Alfred Redmer, Jr. with the Maryland Insurance Administration issued a bulletin encouraging insurers to waive the commercial use exclusion in their contracts. Insurers wishing to do so should file an endorsement form with the Insurance Administration, which has chosen to waive the filing fee and will review and approve the filing within 24 hours of submission, if possible.
On March 27th, Commissioner Mike Kreidler of Washington State, issued a press release urging insurers to provide coverage to delivery drivers. The press release said The Office of the Insurance Commissioner will quickly review and approve endorsement filings so that coverage is available to drivers quickly. Commissioner Kreidler noted how several insurance companies have already agreed to provide coverage to deliver drivers and that he expects other insurance companies to do the same.
Insurers may want to consider voluntarily modifying their claims practices to allow coverage under personal auto policies for claims submitted against or by insureds acting as delivery drivers during the coronavirus outbreak. They can expect that state insurance regulators will look for ways to extend coverage for insureds making needed deliveries to their local communities during this emergency, as well as provide coverage for their citizens who are injured in accidents with these delivery drivers.
(For a regularly updated list of U.S. federal regulations related to the COVID-19/novel coronavirus update, please click on this link to the
Skopos Labs Coronavirus Policy Tracker.)