The car insurance experts at MoneySuperMarket are warning unknowing motorists that using their personal vehicle to make regular deliveries of items from buying and selling sites like eBay, Gumtree or Facebook Marketplace could be invalidating their car insurance policy.
Recent industry estimates from the Retail Technology Innovation Hub suggest that over a quarter (27%) of shoppers are using Facebook Marketplace to buy second-hand goods. However, people making regular sales on these kind of platforms may be unknowingly breaching their car insurance terms when making their deliveries.
If your delivery driving falls into HMRC’s definition of ‘trading’ it means standard car insurance won’t cover any accidents or damage that occurs on these journeys. Without the right policy, many drivers making unassuming side hustle deliveries could be driving uninsured.
Alicia Hempsted, car insurance expert at MoneySuperMarket said, “Hobbyist delivery driving falls into a grey area; many drivers may not realise that using their cars for regular deliveries could impact their insurance.
“Because the rules aren’t outlined explicitly in insurance documents, there may be some room for interpretation between insurers and policy holders. If a driver is selling and delivering items in such a way that could be defined as ‘trading’ their car insurance may not cover them on journeys made to their customers or to any storage facilities.
“If you use your vehicle for delivery driving in a way that qualifies as ‘trading,’ you must update your car insurance policy to ‘business use’ to make sure you are properly covered.”
While HMRC’s definition of ‘trading’ can provide useful guidance, individual insurers may have varying criteria for determining whether a driver’s activities require business insurance. HMRC defines ‘trading’ activity as:
- a) seeking profit by actively buying items with the view to sell
- b) having regular/ frequent sales
- c) trading goods quickly after acquiring them
- d) selling goods that have been purchased with the explicit intention to sell as opposed to goods that have been inherited or gifted
The risks of using your car for delivery work
If a driver has an accident while delivering items that could feasibly be defined as ‘trading’ activity, and they haven’t informed their insurer that they are using their car for commercial purposes, they could be held personally liable for damages and repairs.
Many insurance policies will include a key clause outlining that it is a requirement to disclose any significant changes in vehicle use. If an insurer discovers that a car has been used for deliveries without notice, they may void the policy entirely.
Want to avoid driving uninsured? Here’s how to make sure you have the right cover:
- Check your current car insurance policy for exclusions related to business or commercial use.
- Inform your insurer if you plan to use your car for deliveries and ask about suitable policies.
- Consider specialist ‘hire and reward’ insurance that covers parcel delivery, either as an add-on or a separate policy.
- Look into short-term courier insurance if you only deliver occasionally. Flexible policies are available for part-time workers.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.