Amazon Flex may VOID your auto insurance policy
Amazon Flex provides a commercial policy for its drivers, and tells its drivers that they must "maintain personal auto insurance if you are driving a personal vehicle." But did you know that you might also need your own commercial auto insurance policy in addition to the Amazon Flex commercial insurance policy? Or that by driving for Amazon Flex, you could actually be voiding your personal auto insurance policy?
But wait, how can that be? This seems to contradict what Amazon Flex states in its insurance explanation. After all, they have obtained a generous insurance policy with extensive coverage especially for Amazon Flex drivers which, in theory, should mean that you don't need your own commercial insurance policy.
The unfortunate reality is that Amazon Flex's insurance explanation provides only part of the story. The fact of the matter is, you are mixing two different insurance policies, and even though you might be OK with Amazon Flex, you may not be OK with your personal auto insurance policy.
Below, we'll take a look at both Amazon's commercial auto insurance policy, and then why a personal auto insurance policy might not be compatible with Amazon Flex.
Amazon's Commercial Auto Insurance Policy
Amazon Flex has a section under the HELP menu in the app that explains all FAQs related to insurance. Below is a summary of the insurance coverage that they provide:
Amazon provides an auto insurance policy--the Amazon Flex Auto Policy-- at no cost to you that includes Auto Liability coverage, Uninsured Motorist/Underinsured Motorist coverage, and Contingent Comprehensive and Collision coverage. This policy applies when you are using Amazon Flex to deliver packages, pick up packages, and return undelivered packages back to a designated location. This policy does not apply to drivers in New York. Drivers in New York are required to have their own commercial coverage.
You'll need to maintain personal auto insurance if you are driving a personal vehicle or ensure that you have required insurance coverage if you are renting or borrowing a car.
There are additional details about the amount of coverage they provide, and in general the terms are quite generous. As far as the amount of coverage you are provided while you are completing deliveries for Amazon Flex, you will generally be OK.
How about your our own personal auto insurance policy?
Further down in the Amazon Flex insurance FAQ, however, you will notice one answer which says that "it is your responsibility to understand the terms of your personal insurance coverage and to get in touch with your personal insurance company if you have any questions."
This is a roundabout way of saying that your personal auto insurance situation is your problem, not theirs. On the surface, this seems reasonable - after all Amazon Flex is only contracting you for your delivery services and you are not an employee. What Amazon Flex is not telling you, however, is that by driving for Amazon Flex, you could be voiding your personal insurance policy.
Why would my personal auto insurance policy become void?
The first issue is a potential "misrepresentation of facts."
When you signed up for personal auto insurance, you gave them a set of answers about your vehicle, ZIP code, number of miles driven, etc. One of the questions is likely to be along the lines of "is this car used primarily for commuting, personal or business?"
Just because you are an independent contractor, this does not mean that you are not using the vehicle for business use when you drive for Amazon Flex, even if you have a separate commercial auto policy covering you. In other words, if you indicated "personal" or "commute" only when signing up for your insurance policy, you ended up with a personal auto insurance policy, but by driving for Amazon Flex, you are violating the terms of the policy by misrepresenting the facts about your vehicle (whether intentionally or not) - regardless of whether Amazon Flex is providing separate commercial insurance. All auto insurance companies will certainly have a clause in their policies saying that any misrepresentation (i.e. false statements) about the vehicle or your information will be grounds of voiding and terminating the insurance policy.
Another area where you might get in trouble is by misrepresenting the number of annual miles driven. If you did not intend to drive for Amazon Flex when you purchased the auto insurance policy, you did not account for all those miles you rack up completing those deliveries. So be sure to be accurate and honest about the number of miles you drive each year, including the Amazon Flex delivery miles - otherwise they could dispute your policy when you need it most.
How is that for a wake up call? Unfortunately, things get worse for some policyholders.
The second potential problem is that your personal insurance policy may simply prohibit you from performing any courier work (i.e. Amazon Flex package delivery) regardless of whether you are covered under a separate insurance policy for the courier work.
Some insurance companies will just not sell you a personal auto insurance policy if you drive the car to perform any courier services (i.e. Amazon Flex deliveries), EVEN IF you have a separate commercial auto policy from Amazon Flex. Their justification seems to be that no matter what, if the car is even used for courier services just once, it is categorized as a commercial policy, and therefore if you perform any courier work, whether it is covered by another policy or not, the personal policy becomes voided.
Now, the scariest part is that if your personal auto insurance becomes voided, your Amazon Flex commercial auto insurance coverage may also become voided. This is because one of the requirements for driving for Amazon Flex and their commercial auto insurance is that you have personal auto insurance coverage - but guess what? Your personal auto insurance policy just got voided, and now your Amazon Flex coverage is now voided too!
Commercial auto insurance rates for Amazon Flex
Unfortunately, commercial auto insurance rates will generally be much higher than an equivalent personal auto insurance policy. In some cases, rates may be just tens of dollars more per month, but in others, the price can be hundreds more per month.
Some insurance providers do allow you to drive for Amazon Flex under a personal policy, and this will be your best bet to keep your costs low and stay covered by an effective insurance policy. They will typically add an endorsement to your account, noting that you will be driving for Amazon Flex, and it will be secondary to the Amazon Flex primary commercial auto insurance policy.
With rideshare and on-demand delivery services and independent contractor work flourishing, there is a lot of grey area that still hasn't been sorted out. Be sure to contact your insurance provider and confirm that your policy is still valid even if you drive for Amazon Flex. If not, be sure to find a provider that meets your needs immediately!
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