What insurance do you need as a gig worker

Make sure your insurance covers your side hustle

By Courtney Washington

Updated March 14, 2023

Reviewed By Ross Martin

Edited By Susan Meyer

Table of contents:

Types of gig workers
Auto insurance for gig workers
Other coverage to know about

In a tumultuous economy, more and more workers have turned to short-term gig work and specifically driving for services like Uber and UberEats, Lyft, Doordash, Instacart and others.

More than 36% of the United States workforce comprised self-employed gig workers in 2020. Now, 57 million Americans are involved in the gig working community, which is expected to grow to approximately 87 million by 2027. The gig economy also contributes an estimated $1 trillion to the US economy annually and is only expected to grow over time^[1].

As more gig workers and independent contractors seek contractual employment and take to the streets delivering food, goods and people, what do they need to know about their current auto insurance policies? Will their insurance companies protect them if they’re in an accident while they do their side hustle?

Types of gig workers

At its core, gig work is contact work and falls into all types of categories.

The self-employed

The original gig work services included dog walkers, personal shoppers and other on-demand freelance opportunities where people could be their bosses.
The contract gig

Content creation, influencing and technology firms also hire independent workers on a contractual basis to perform tasks in their specialty for a set amount of time. Sometimes companies can transfer the contract worker to full-time if they like their work and need someone for longer than they originally realized.
The gig platform

Other gig work opportunities include food delivery through apps like Doordash, UberEats, Favor, and Grubhub or grocery delivery through Instacart, Shipt, Walmart or Amazon. Even local grocery chains are hiring their own shoppers and signing people up to be delivery drivers.

However, people who work on a contract basis aren’t officially employees of their contracted companies. Therefore, they’re not eligible for insurance benefits and other protections the company gives to full-time employees. To protect themselves, gig workers must secure their own liability, health and car insurance, depending on which gig they work.

Auto insurance for gig workers

While there are a lot of considerations for gig workers and insurance coverage including health insurance plans, disability insurance and life insurance, but first we're focusing on the auto insurance options.

There are a number of coverage options for people who use their vehicles for gig work.

Drivers with a designated vehicle for gig work and a separate vehicle for personal use can insure their gig vehicle under a commercial policy and their personal use vehicle under a personal policy. Commercial insurance covers the driver the same way a personal policy would, but it takes the higher risk of an accident into account and rates appropriately for it.

Drivers with only one vehicle for personal and business use can get a hybrid policy. They can also talk to their personal use insurance companies about an endorsement that would cover them while gig working. Companies like Geico, USAA, Travelers, Esurance, Progressive, and Mercury have gig insurance that covers the same vehicle for personal and professional use. Other companies, like State Farm, Allstate and Farmer's, offer coverage for gig work but only in some states.

Telling your insurance company

Tell your insurance company during the underwriting process if you are using your car for gig work. Or as soon as you start doing gig work, update them. If you file a claim that occurred while you were driving for your gig, the claim might not be paid and your insurance company may drop you.

Other coverage to know about

Accident insurance isn't the only coverage you should know about. Here are some things to consider, although not all of these will apply to you, depending on what your side hustle is.

General liability insurance

This is used by small businesses to protect them from liability, but can also apply to independent contractors. Companies consider general liability protection an "all-risk" coverage, protecting the policyholder from claims against them if someone is injured or their property is damaged due to something going wrong with the business property.
Professional liability insurance

Also known as errors and omissions coverage, this is a policy that protects a policyholder from the fallout if they unintentionally give bad advice or wrong information. This coverage protects the policyholder from having to pay out an expensive negligence or civil lawsuit.
Workers' compensation insurance

This pays out if a business owner gets sick or injured from a work-related incident. Typically, businesses offer this to employees, but because gig workers work for themselves rather than the gig companies, they'll only have this coverage if they purchase it themselves.
Temporary incapacity coverage

Also known as temporary disability coverage, this pays a cash benefit if a policyholder needs to take a break from working due to mental or physical health issues unrelated to the job. Gig work, like any other job, can be stressful.
Health insurance

Companies issue health insurance on a case-by-case basis. The healthcare marketplace is a good place to start when shopping for health insurance. People looking for private insurance can receive credit depending on how much they estimate they’ll make during the year. They can also pick how much coverage they want and what to pay monthly.