Ontario man has $15,000 insurance claim denied due to working as food delivery driver

In the "gig" economy, many people are using their vehicles to earn extra money and a popular way to do that is to be a food delivery driver.

A Milton, Ont., man who came from India as an international student was working occasionally for a food delivery service, but he was not making a delivery when a stolen car crashed into him earlier this year.

“I’m just totally broken because I am in a big financial burden right now," said Ranjan Yadav Vannarathu.

Vannarathu bought a 2015 Honda Accord and to earn extra money last October he started delivering food for the company Skip the Dishes.

In January, when he was driving home a stolen vehicle slammed into his car on the Don Valley Parkway and the occupants of the vehicle got out and ran away.

“My car got hit on the opposite side and it was not drivable. The driver and the two passengers in the car that hit me ran off,” Vannarathu said.

Vannarathu said he called the police and reported the accident to his insurance company. He was insured with the Co-operators Insurance Company and he was asked if he had ever used his car to earn income.

“They asked if I was doing any food delivery services and I said I was driving for Skip the Dishes,” Vannarathu said.

That’s when he said he was told driving for a food delivery service was a “material change in risk,” and his $15,000 insurance claim was denied.

The Insurance Bureau of Canada (IBC) said that anyone who is using their vehicle to deliver food has to realize that they are considered to have a business-use vehicle.

“If you don't have the right coverage it could end up costing you greatly," said Anne Marie Thomas, the director of consumer and industry relations with IBC. “As a delivery driver for one of the apps, therefore the vehicle is considered a business-use vehicle or partial business-use vehicle."

IBC said some delivery services like Uber Eats do provide insurance coverage for its drivers while deliveries are being made, but others do not.

On the Uber Eats website, it says drivers are covered by Economical Insurance and coverage includes protection in case of an accident occurring between accepting a delivery and reaching a delivery destination.

On the Skip the Dishes website it says, “Requirements to be a courier are 'a reliable vehicle, a valid driver’s license, vehicle insurance, vehicle registration, background check.”

When CTV News Toronto reached out to Skip the Dishes, a spokesperson said “We aren't able to offer commentary at this time.”

When CTV News Toronto reached out to Co-operators Insurance Company, they agreed to review Vannarathu’s case.

“New information has come to light as a result of our ongoing investigation about specific details that are unique to this accident," a spokesperson for the insurance company said.

"Based on that new information, we are pleased to share that we informed Mr. Vannarathu that we are able to cover all appropriate costs relating to the physical damage to his vehicle.”

“However, we’d like to remind consumers to inform their insurance provider when their situation changes, to avoid challenges with coverage in the event of an accident."

That was great news for Vannarathu who will now have his $15,000 claim covered.

“I just feel relived right now and stress free,” Vannarathu said.

If you're working as a food delivery driver, you may want to check coverage with your insurance and the app you work for. If you have to pay extra for commercial insurance, it can cost thousands of dollars per year, which may make being a delivery driver not worth it.