Instacart Insurance: How to Stay Covered and Avoid Issues

Instacart requires all of its Full-Service Shoppers who use cars for their deliveries to have car insurance that meets at least their state’s minimum requirements. So, if you want to shop for Instacart, you’re going to need to make sure you have the right coverage.

If you want to do Instacart on an e-bike, moped, or as a walker (allowed in NYC only), you don’t need to have car insurance (but you may need other insurance). 

But finding the right coverage can be harder than it may initially seem. Even if you meet Instacart’s requirements, you can still run into problems with your insurer — most providers aren’t happy with the increased risk that delivery gigs present. 

Here, we’ll tell you everything you need to know to steer clear of trouble when sorting out your insurance for Instacart. 

Do you need insurance for Instacart?

In most cases, the answer is: yes!

The Instacart Independent Contractor Agreement says that shoppers need to have whatever car insurance covered is required by law — in other words, you need to meet your state’s minimum requirements. Here’s how Instacart puts it in the agreement:

• 6.2 ON A CONTINUING BASIS, AND UNLESS THE LAW REQUIRES OTHERWISE IN YOUR JURISDICTION, YOU SHALL BE SOLELY RESPONSIBLE FOR:
  • …
  • e. SECURING AND PAYING FOR AUTOMOBILE INSURANCE IN COVERAGE AMOUNTS CONSISTENT WITH LEGAL REQUIREMENTS, INCLUDING ANY REQUIRED NO FAULT AUTOMOBILE INSURANCE OR COMMERCIAL LIABILITY INSURANCE; AND;
  • …

All drivers are required to have auto insurance in 48 out of 50 states (Virginia and New Hampshire are the two exceptions). So, if you live or work in a state that requires car insurance, you need to make sure you meet your legal requirements. 

If you don’t use a car for your Instacart work, you don’t need car insurance (but you may need another type of insurance). 

Instacart doesn’t provide insurance 

Instacart does not provide car insurance — it’s your responsibility to procure and pay for your own coverage. 

However, Instacart does partner with Stride, an insurance broker that can help make it a bit easier to find your own insurance. Although Stride can’t help you find car insurance specifically, it can connect you with accident and health insurance. 

According to James Tuliano, who has been gigging consistently since 2020, “They can get you pretty decent discounts on Stride…in addition to accident insurance, you can also get health/dental/vision insurance and discounts on tax software.”

Instacart may ask for proof of insurance

Instacart doesn’t ask shoppers to submit proof of insurance during the signup process, but it reserves the right to ask for proof at any time. For example, if you get into an accident while working, Instacart might ask to see your proof of insurance. 

If Instacart makes that request, you’ll send in your proof yourself — Instacart won’t reach out to your insurer to check. 

You don’t need commercial or special insurance for Instacart, but it may be a good idea in some cases

You don’t explicitly need commercial insurance to drive for Instacart. Officially, Instacart has this to say about commercial car insurance:

• YOU FURTHER UNDERSTAND THAT ITEMS LISTED IN THIS SECTION (FOR EXAMPLE, COMMERCIAL AUTOMOBILE INSURANCE) MAY BE REQUIRED IN YOUR JURISDICTION, AND YOU AGREE THAT IT IS YOUR RESPONSIBILITY TO DETERMINE IF ANY OF THE ABOVE IS REQUIRED. YOU AGREE TO ABIDE BY ALL APPLICABLE LAWS, STATUTES, AND REGULATIONS AS THEY RELATE TO THIS SECTION.

Ultimately, it’s your responsibility to stay on top of your state’s laws and get whatever insurance they require. As long as you do that, Instacart doesn’t have any specific stipulations of its own.  

However, it’s worth noting that personal insurance may not cover you while you’re on the clock, so getting commercial insurance may still be a smart idea.

Most insurance providers have a clause called a livery exclusion in their personal auto insurance policies. This clause means that if you're using your car for business purposes, such as delivering goods or people, you won't be covered under your insurance. This applies to all gig economy driving jobs, including Uber Eats, Grubhub, DoorDash, Shipt, and others.

Since driving for Instacart involves using your vehicle for commercial purposes, many personal auto insurance policies won’t cover incidents that occur while you're on the job. In those cases, a commercial auto insurance policy can really save your wallet. 

Don’t try to hide your gig work from your insurer

If you aren’t honest about your activity (for example, if you get in an accident while delivering for Instacart and tell your insurance company it was a personal trip) it likely counts as insurance fraud and could land you in a heap of legal trouble. 

James says: “Even if you aren't at fault, you'll still likely end up being liable for the damages if you don't add commercial coverage. It's an added cost to your bottom line but it ALWAYS makes sense to add it.”

Insurance companies are extremely thorough when investigating claims and are motivated to sue for fraud and falsifying information. This is a felony in many states and can endanger assets like your home and vehicle. While it can be tempting to try and save money by flying under the radar, it’s not worth the risk.

So if you can’t use personal insurance, what’s the best option? The next sections cover different possibilities for vehicle insurance for Instacart drivers.

How commercial insurance affects your premium (if you choose to get it)

Commercial car insurance is designed for vehicles used for business. These policies tend to cost more than personal auto insurance, but they can end up saving you money if you get into an accident. 

In many cases, you won’t need a full commercial policy — Business Use Coverage is usually enough (we cover this in the next section). That said, it’s good to know about all your options so you can make an informed decision.

Understanding commercial insurance

Commercial insurance typically covers more risks than personal insurance because business activities (like delivering groceries) can put you and your vehicle in more situations where accidents might happen. Since there's a higher risk for insurance companies, this often leads to higher premiums compared to personal insurance policies.

Factors affecting premiums

Several factors can influence the cost of your commercial insurance premium:

• Vehicle usage: The more you use your car for Instacart deliveries, the higher the risk of wear and tear and accidents. Insurance companies consider this increased risk in their pricing.
• Coverage levels: Commercial policies offer various coverage options tailored to business needs, such as liability, collision, comprehensive, and cargo insurance. Opting for extensive coverage naturally increases your premium.
• Vehicle type: The make and model of your vehicle can also impact your insurance costs. A larger or more expensive vehicle might have higher premiums due to the increased costs of repairs and parts.
• Driving history: Just like with personal insurance, your driving record plays a crucial role. A clean driving history can help keep your premiums lower, even on a commercial policy.
• Geographic location: Operating in densely populated urban areas, where accidents are more likely, can lead to higher premiums compared to rural areas with less traffic and lower accident rates.

Balancing costs with needs

While commercial insurance offers protection that’s more tailored to Instacart deliveries, it can increase your premium significantly. It’s important to compare quotes from different insurers and do your own risk-reward analysis to determine whether commercial insurance is the right choice for you. Maintaining a good driving record can also help you qualify for possible discounts.

In many cases, you don’t need a full commercial policy

Securing optimal car insurance as an Instacart Shopper usually means upgrading your current personal car insurance plan to include something called Business Use Coverage. Instead of being a dedicated plan for an exclusively commercial vehicle, Business Use Coverage is intended to cover partial or occasional business use. 

Start by reaching out to your insurance provider. Inform them about your Instacart gig and inquire about Business Use Coverage — typically it will only add a modest $10-30 to your monthly insurance bill.

For instance, USAA offers its own USAA Rideshare Business Use Coverage that applies to delivery use cases. State Farm customers might consider the company's Rideshare Business Use Coverage. 

What about rideshare insurance?

Rideshare insurance is designed for platforms like Uber and Lyft, where passengers are transported. Instacart, on the other hand, involves the delivery of goods, not people. This distinction is important because rideshare insurance is a separate add-on or policy that covers the gap between personal use and full commercial use. 

However, some insurance companies appear to be open to using rideshare insurance for Instacart. Ask your insurance provider about this possibility.

You can deduct a portion of your insurance premiums from your taxes

As a contractor, some of your car insurance premiums can count as a deductible business expense. Come tax time, you'll calculate your net earnings from Instacart after subtracting allowable deductions like insurance costs allocated to work use. Then, you’ll only get taxed on those final profits.

There are two methods the IRS permits for deducting vehicle expenses:

• Itemized deduction: You track every penny spent on car operating costs including insurance, gas, maintenance, etc. The portion attributed to Instacart work based on mileage logs is deductible.
• Standard mileage: The IRS decides on a flat per-mile deduction rate each year, which is $0.67 for 2024. You'd multiply this rate by your total logged miles driven for Instacart deliveries.

The Standard Mileage Rate is usually simpler for Instacart shoppers. Your actual insurance premiums are irrelevant — you just need miles tracked.

To take advantage of these deductions, you have to keep track of your driving activity. Luckily there are apps like Stride and Hurdlr that make miles tracking a breeze by automatically logging your drives. They also estimate taxes owed and maximize deductions for things like phone costs, Instacart service fees, and more. Their structured recordkeeping is valuable at tax time.

If you opt for an itemized deduction, then you’ll the portion of your premium that goes towards your Instacart work. For example, if you drive 10 hours each week, and 2 of those hours are for Instacart, then that’s 20% of your total driving that goes towards Instacart, and you can likely deduct 20% of your car insurance premium. 

Make sure you confirm this with a tax professional — different insurers may calculate usage differently. For example, if you have comprehensive coverage, which covers your vehicle even when it’s not in use, then your insurer may consider those 2 hours of Instacart only 1.1% of your monthly premium (based on working 8 hours per month in a 30 day month, which comes out to 8/720 hours). 

How to file an accident claim while shopping for Instacart

If you're involved in an incident while making a delivery and have the right policy, you should be covered. 

However, if you're not actively on a delivery but have the Instacart app open and are waiting for orders, the situation becomes more complex. It's essential to understand the specifics of your policy and possibly seek additional coverage for this grey area. Don’t be afraid to ask highly specific questions of your insurance provider, and ask for whatever answers they give you in writing.

Whatever the situation, if you’re involved in an accident while driving for Instacart, be sure to collect the other party’s insurance information, take photos, and record the contact information of bystander witnesses if prudent.

What is the best insurance for Instacart shoppers?

There is no one-size-fits-all solution to this question, but based on reports from drivers nationwide, your best bet is to explore adding a business use endorsement or rideshare coverage to your existing personal auto insurance policy. 

These additions are designed to span the gray area between personal and commercial use, providing coverage while you're actively making Instacart deliveries.

Although dedicated commercial insurance policies offer comprehensive protection, they can be prohibitively costly. A more affordable approach is inquiring with your current insurer about their business use or rideshare endorsements, which typically add around $10 to 30 to your monthly premium. Major insurers like USAA, State Farm, and others have started offering such endorsements specifically for gig economy workers, like Instacart shoppers. 

Remember that being upfront with your insurance provider about your Instacart driving is crucial. Concealing this commercial activity could be considered fraud and void your coverage entirely if an incident occurs while delivering. 

In summary: a step-by-step guide to Instacart insurance

It’s clear that having the proper insurance coverage is essential as an Instacart driver, but you don’t want to overspend either. Here's a step-by-step guide to help you find the best balance between coverage and cost:

1. Notify your current insurer. Before hitting the road for Instacart, inform your current auto insurance provider that you'll be using your vehicle for commercial purposes. Be upfront and honest to avoid any issues down the line.
2. Inquire about rideshare or business use endorsements. Ask your insurer if they offer rideshare or business use endorsements that can extend your coverage to include Instacart deliveries. These are typically more affordable options compared to a full commercial policy.
3. Compare quotes from multiple providers. If your current insurer doesn't offer suitable coverage or if the rates are too high, shop around. Request quotes from other insurance companies that cater to gig economy workers and compare the costs and coverage details. Credit Karma can make personal recommendations for you based on your credit score, helping you find the best and cheapest deals.
4. Consider your driving frequency and needs. Will you be driving for Instacart full-time or just occasionally? Your anticipated mileage and frequency of deliveries can help determine the level of coverage you require and whether a commercial policy is necessary.
5. Review the policy details carefully. Once you've chosen an insurance option, thoroughly review the policy details. Understand what's covered, the deductibles, and any exclusions or limitations that may apply during Instacart deliveries.
6. Keep detailed records. Maintain accurate records of your mileage, earnings, and expenses related to Instacart driving. This information will be crucial for maximizing tax deductions and ensuring you have proper documentation in case of an incident.
7. Revisit your coverage annually. As your circumstances change or as insurance companies update their offerings, revisit your coverage annually. Adjustments may be necessary to ensure you're adequately protected while working as an Instacart shopper.

Remember, having the right insurance coverage not only protects you financially but also provides peace of mind while you're on the road delivering for Instacart.

Get started

Can you see yourself as an Instacart Shopper? Apply now to get on the road.