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Saving Money on Insurance in the Gig Driving World - The Struggle

So one of the most common questions that come up when someone wants to work with a rideshare company or food delivery company is if you need to have a special insurance in order to drive for these companies.

While the answer is no, you don't need special insurance in order to drive for rideshare or food delivery companies, you actually wouldn't be covered in the event that you got into an accident during a gig if you were covered normally.

This is why I feel like the internet is very misleading when it comes to shopping for insurance, because in most cases the information is inaccurate or is expensive and not worth it.

That being said, there are things that you can do that can not only make sure you are covered for a potential accident or other event with your vehicle, but to also reduce your monthly costs in the process.

So in order to help you keep your vehicle and your wallet protected I am going over some tips and tricks that can help you save money and keep you covered by your insurance even if you drive in the gig economy.

My name is Joseph Mandracchia, I have been working full-time with the gig economy since 2018 and have completed over 9700 orders and deliveries across several different platforms and pay models, as well as other forms of income.

It is my hope to impart some of my knowledge and experience unto you to help you make the most money in your side hustle and help you on your journey to achieve financial independence so you can choose to live your life in anyway you would find valuable to you.

Disclaimer: I am not a financial, tax or legal advisor of any kind. I am not giving you financial, tax or legal advice. I am simply expressing what I have done to overcome in this area and hoping you can find a take away for yourself within this article.

Never Speak of a Company Name

If you are driving for a gig company and you are involved in something that you need to make a police report for, one of the worst things you can do is say you were working on Doordash, Uber or some other company when it happened.

Once those words leave your mouth and end up on a police report, they can destroy your chances of getting any coverage for your accident or damage to your or other vehicles involved.

Granted that if you had someone in the car or are wearing some of their merch (which I do not recommend) then they can fill in the blanks, but overall try to avoid any talk about what you were doing.

As far as the police were concerned, you were picking up some food for yourself that was placed online. Not a lie and you are covered under your insurance. Sometimes you simply need to just answer questions and speak less.

Check Your Company For Insurance Claims

So most gig workers don't know this but if you are on an active delivery, and you are liable for damages for the vehicles, you can actually file a claim with the company and they will cover the damages for the other vehicle.

They simply state that you can file a claim on their site, for example Doordash actually has a claims form that you can file an insurance claim with, and they will cover you. This has also been recommended to those who have been victim to car theft during a delivery.

Now that being said, that is what these companies recommend but how much they actually help you with, is not something I have directly dealt with (knock on wood).

In any case, they do make a point to mention that they don't help when you aren't on an active delivery or that you are not liable for the damages, they will not help you with your claim.

Also, even if they help you with the damages to the other parties vehicle they will not help you with helping you with your damages, so that will come out of your pocket no matter what.

Install Anti-Theft Equipment

One of the ways that most insurance companies will be willing to lower your insurance bill for is having anti-theft equipment installed in your vehicle. This will show them that in the event that your car is stolen (heaven forbid), that your vehicle can easily be found.

This includes GPS tracking, ignition kill switch and OnStar if each of these things are not already installed in your vehicle. Some newer models can have each of these items built in but for those that don't, you can do save yourself some big bucks with a small investment.

If you aren't tech-savvy, that's fine. Most mechanics know how to install these things if you just bring them the equipment.

Install a Dashcam

While there is no "dashcam discount" with insurance policies, it is very useful in the event that you get into an accident that is not your fault. Since most likely the footage of the accident can be used to make your case.

This can help not have your premium raise or have you charged in the event of an accident where you aren't at fault or finding someone who potentially commits a hit and run.

This cam can also put you in a position to combat insurance fraud, which some people actually intentionally involve themselves in a car accident just to make money on insurance. This is commonly known as a "crash for cash".

An average family spends anywhere between $400-$700 a year because of people like this, and it affects people and families everywhere.

Activate Trimbot

Trimbot is a service that can automatically negotiate down your insurance policy for you, as well as give you financial guidance. It normally costs a fee to activate and they make more if they help you save money on your insurance.

They only charge you more if they successfully save you money and they don't just work with insurance either, they can also negotiate your phone bill, your bank fees and credit card interest and fees.

They can also help identify subscriptions that you aren't using or need and cancel them for you.

This app is filled with other features that help save money, get better rates and more! There is a free version which is limited, the premium plan is only $99 a year which pretty much pays for itself if you utilize all of it's features.

Learn to Negotiate Yourself

So if you don't want to pay someone else to negotiate on your behalf, then perhaps learning to negotiate your rates down yourself is the most effective way to go about it. Never hurts to learn a new skill and this one can help you in many areas of your life.

There are endless amount of books you can read and courses you can take about negotiation, and it is a skill that can help you reduce costs on your insurance among other things, receive raises that you wouldn't be able to otherwise, and many other things.

One of the books that I have found to be valuable in my journey in life is Never Split the Difference by Chris Voss. Voss was a hostage negotiator for the FBI and he has grew his negotiation skills to make a living teaching others to negotiate with his books and courses.

His book not only helped me save money, but also helped me approach social interactions in a more beneficial way for all parties involved. It is available as a physical copy, e-book or an audio book on Audible.

Take a Defensive Driving Course

The next way you can reduce your insurance cost is by taking a defensive driving course. It is not only a skillset to learn, but it also is proven to lower your insurance premium anywhere from 5-20% depending on your company.

This may cost you more initially, due to the cost of the actual course usually cost $15 to $100, however this investment will reduce your cost on your insurance paying for itself in a long term time frame.

In the absolute worst case scenario, you pay the highest amount for the course which is $100 and get the lowest discount which is 5%.

Now let's say you have the highest car insurance rate which in Louisiana, being the most expensive state to insure your vehicle, is $2762 a year ($255 a month) according to which would bring your savings to $138.10 a year ($11.51 a month).

In 8 months, you would have your money back from your initial investment and every dollar saved after that stays in your pocket.

Drive a Pre-Owned/Older Vehicle

It is no surprise to anyone that pre-owned and older vehicles are less expensive to insure, they cost less in value and are overall less coverage necessary for the vehicle. The best rate typically go with cars that are at the bottom of their depreciation curve.

Now with that said, I don't believe in driving a junk car because that will cost you more money than it would normally be worth just to get it repaired, maintained and keep it running.

So make sure if you are going to drive a pre-owned vehicle, drive one that works well and doesn't need that much repair.

Drive a "Greener" Vehicle

As we have seen in many arenas, in politics, investments and many other places, we are beginning a transition into making a more sustainable and environmentally friendly forms of energy and transportation.

That also means there are certain discounts to driving and insuring a vehicle that is more environmentally friendly as well. Some insurance companies give as much as a 10% discount, which if we include the earlier example of Louisiana, that's saving $23 a month!

This will also help save you money on gas and maintenance since your car will be using either less fuel or not at all. In fact, some vehicles that fall into these categories include electric vehicles that have significantly less moving parts than gasoline engine vehicles.

Which means you will need to bring it back to the shop much less often and thus bringing down the costs of driving your vehicle. However, EV's take more time to charge then your average vehicle and that can be a hassle, so keep that in mind.

Now a greener vehicle can also include hybrid vehicles as well as other alternative fuel vehicles such as biodiesel, ethanol, etc. The main challenge you will have is finding a station that can fuel your vehicle, although a small amount of research should solve that quickly.

Shop Around for New Policies

Loyalty can be described in a lot of positive ways, although profitable isn't one of them. People who decide to stick with one insurance policy over their whole life tend to spend 50% more on insurance than those who shop around every 6-12 months.

The best deal you found when you first got your insurance may not be the best deal you can get now. So it is a good idea to keep shopping around and see if you can get a better rate, similar to how you can switch companies to get a better salary.

Improve Your Credit Score

Whenever you are shopping for a new insurance policy, the company you request an insurance quote with is going to run a soft inquiry on your credit score and that will determine your rate and if they will insure you or not.

Some companies will absolutely not insure you if you have a poor credit history or in some cases, lack thereof. If they don't block you off entirely, they can absolutely jack up the price on you.

So it wouldn't hurt to just simply build up your credit score, so you can take advantage of great deals for insurance that most people can't qualify for otherwise. Not to mention that this puts you in a position of strength in a negotiation standpoint.

Look Into Bundles for Policies

So let's say you don't want to spend a lot of time shopping for policies or you already got the best policy in your area, and shopping around won't do any good at the moment. Let's talk about bundling insurance policies.

Whenever you go to or contact an insurance provider, they often have policies for various things, not just cars. This can include but it is not limited to, renters and homeowners insurance, motorcycle, RV, boat, etc.

So one of the best the ways you can save money is to have all your policies for one company and not have 5 different companies for 5 different types of insurance (figuratively speaking).

Now one thing I will say is to not take a higher insurance policy premium for one type of insurance for the sake of bundling. Taking a higher insurance on one side or even buying an insurance policy for someone that you don't need, it is normally a net negative.

Just make sure if you are going to bundle that you are not only going to need it but you are going to be paying less for both policies, otherwise it is a loss of money or a total wash.

Don't Pay for What You Don't Need

Now while that might seem like something that Liberty Mutual is promoting themselves, the do bring up a good point. Most companies have you set up for policies that most people don't actually need or way more coverage than what anyone will actually use.

For example, you don't need to have coverage for an uninsured driver unless you are living with people that routinely drive your car, or you might have someone in your life that will borrow your car for something.

Now what most insurance companies will do is say they recommend that you take out the insurance "just in case" and will continuously upsell you, and let's be honest, that is their job! Good for them for being good sales people, but that's not what most people need.

Basic auto insurance is more than enough for most gig drivers on the road, so make sure those are the quotes you are receiving.

One other note on this, don't open up extra policies if you don't need them either. I get that bundling is great and there are a lot of discounts that come with that, but don't just start opening up policies and falling into the perpetual sales trap.

Try to Not "Need" Insurance

Okay, so this falls under the category of take this with a grain of salt. The last way you can save money on your car insurance is to not "need" car insurance in the first place.

This ranges from driving carefully, having the Dashcam, and trying to work out accident disputes between you and the person you had an accident with, assuming no one is hurt, you are not at fault and the damage is minimal.

Now this is a bit risky if you are at fault for the accident but, honestly this is better than alternative which is that your insurance premium goes up and you won't be able to get a good rate for a while.

Accidents tend to stay on your vehicle record for at least 3 years, depending on the state you live in and your insurance company. Which during that time, it is advised to not shop around for new insurances by most insurance professionals.

So with that said, if you can just simply ask to deal with the issue without involving law enforcement and insurance companies, you will be better off. This applies whether or not you are at fault.

It really amazes me how you are required to have car insurance just in case, but when you need it, your premium goes up and costs you more money even if you didn't even do anything wrong.

Like you are punished for being at the wrong place at the wrong time. It's one thing if you are the one at fault, but if someone rear-ends you and you were literally not involved, same result reflects on your car insurance.

Final Remarks

Now while these tips have helped others as well as helped me, there is no real guarantee that they will work for you, although I really hope that they do.

My hope is to be able to help all gig workers that have the ambition and drive to really make this a full-time living for themselves be able to make the most money possible, while saving them most money that they can, and be as equipped as possible to succeed!

With that said, thank you so much for taking the time to read this article, I really appreciate it! I hope you found some value in what you read here and will apply this information in your life and success in your side or main hustle!


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