So, I took the plunge! About 3 months ago I decided to give Shipt a whirl and see if it was all the hype that my busy professional mom girlfriends were claiming. And oh, my goodness were they right!
The fact that I can now do my weekly grocery shopping while sipping an iced chai at airports all over the US as I travel for classes and conferences, has me hooked!
We say all the time, that time is our biggest resource. Well now I am saving at least 5 hours a month that I would use roaming grocery store isles, waiting in lines at the checkout, lugging and hauling groceries (the worst of which is cases of bottled water since our family doesn’t drink soda), and doing so regardless if it’s a beautiful day and I could be at the lake, or if it’s a snowy blustery day where I freeze on the way into and out of the store, and let’s be honest, until I’m back home an hour or so in the heat.
What’s even better is that I know I’m saving money. I’ve done the math. Yes, I am spending $99 a year for the service, but those 60 hours a year I am saving, are so worth that to me. Plus, I don’t add groceries into my cart just because they are impulse items I see and think – oh sure, I need that stacked next to the 15 other cans of ‘stuff’ that eventually I will throw out or donate to a food bank as the expiration dates get closer and I forget to plan a meal around the item that I had to have just because it was 50% off.
So how does this relate to insurance? Because I have asked Shipt drivers about their auto insurance while using it for this business. None of them see it as a business though. I’ve not once heard, “Well I called my insurance agent and told them”. Instead I get, “Why would I call them? I’m just grocery shopping.”
Yes indeed, it’s just grocery shopping; for others, while being paid, sometimes daily, sometimes 3-5 runs a day. And before this your vehicle was rated pleasure use because it sat at home 60% of the day.
The insurance issue here is huge. Personal auto policies have a very well-known exclusion that really, only us insurance geeks can attest is ‘well known’. Most clients have no idea that using a vehicle for business, conveyance or livery service is ‘specifically’ excluded. This means they don’t hint at it or suggest it; but the policy spells it out for you, an example of which reads:
Liability Coverage does not apply:
a. to any person for bodily injury or property damage arising out of any automobile while used as a public or livery conveyance.
In English public or livery conveyance means hauling around people or items, and being paid to do so, which is exactly what Shipt, Uber and Lyft are all about.
Insurance companies specifically put these exclusions into personal auto policies because they did not want to insure business owned vehicles. A Michigan personal auto insurance policy is not written or rated for contractors that are hauling trailers of materials and supplies, or realtors driving clients around consistently in their vehicles, or postal workers who are constantly on the road 7 days a week. These individuals are spending a large part of their day in their vehicles which increases their chances of an accident and some of them are carrying around passengers which increases the likelihood of multiple injuries the insurance company could be forced to pay for. That is why there is a business auto policy that properly protects these scenarios.
So, these driving and delivering ‘conveniences’ have been around for anywhere from months to a couple of years depending on your location, so it’s given insurance companies time to get up to speed and find ways to insure these issues, right?
Well it depends.
Don’t you just love insurance? – No? – I’m the only one?
Insurance has a slow approach to these new exposures because they need to give them time to evolve. It takes time to learn the exposures, how the companies are going to self-insure, accidents, lawsuits, juries, verdicts, and resulting case law for them to then figure out how to amend policies with additional exclusions to not insure, or if they are ok with providing the coverage; the proper endorsements and premium charge to add the coverage.
Many people assume or tell me that Shipt covers them, so they are fine. But how many are ‘reading’ the contract that tells them ‘what’ Shipt is covering? About as many as read the rental car agreements we get calls about annually, would be my guess.
The most recent documents I have read about Shipt’s provided insurance, is that it is for liability when the driver is on an active delivery, which is a term they ‘define’. (Side note: whenever you see words in an insurance contract in ““quotation marks, it means they are defined elsewhere in the policy).
So, riddle me these scenarios:
What about damage to your vehicle when you slide on ice into the ditch while trying to maneuver your vehicle out of a client’s driveway?
What happens when you rear-end their parked vehicle on your way out of their driveway or another vehicle in their subdivision as you’re leaving?
Worse yet, what if you back over a child riding a bike or who began playing behind your vehicle while you were in the house dropping off packages?
Once you completed that delivery, coverage ceases with Shipt for liability, and if your policy contains the exclusion as I defined above, it will NOT pay for any of these scenarios. Why? Because if you were not using your vehicle for a business, it would not have been involved in those accidents.
So, when those things occur, you get to use your own checkbook – A LOT! You will need it to fix your own vehicle, to pay to fix theirs, and to hire your own attorney for lawsuits that could arise out of injuries to others.
I’ve always said that insurance is really all about just that: Who’s checkbook do you want used? Yours or Ours? I can tell you that ours contain a lot more zeros than most, and that it’s much less painful for you when we use our checkbook to protect, defend and make you whole, than when you must use your own.
The bottom line is this; you need to be in touch with your insurance agent when you begin doing any of these services. There are ways to protect you properly, (and yes, it’s going to cost more), but we cannot do that if we don’t know the new exposures you have opened yourself and your family up to.
As always, we are here to help you with your personal, business and life insurance needs and are more than happy to answer questions regarding these issues.