Insurance - Pay as you go food delivery insurance
Pay as you go food delivery insurance is the most cost effective manner in which to cover a vehicle for food couriers in the UK. This is a form of Hire for Reward insurance couriers in the UK must have to legally operate and deliver food to a third party. This type of courier coverage only covers the vehicle while it is on the job. The fewer the miles it is used, the lower the insurance premium will be.
How does pay as you go food delivery insurance work?
The logic behind pay as you go food delivery insurance is that the fewer the miles traveled by the courier, the lower the risk so the lower the premium will be.
The mileage is tracked with the use of telemetric technology that includes a black box which is installed on the delivery vehicle. This tracking device stores numerous data points that will be reviewed by the insurance company and used to determine the cost of the premium for the courier’s insurance policy.
Pay as you go bike insurance
The pay-as-you-go insurance model is also popular for drivers that provide a bike delivery service. Again you pay only when you are operating as a courier.
What is tracked by the black box?
Each insurance company has their own criteria for determining the premium and what data is used. The telemetric technology can record many data points, including the following;
Is the pay as you go food delivery insurance coverage all that is needed?
No, the pay as you go food delivery insurance coverage is only valid when working and delivering food items. This is a Hire and Reward policy. When the courier is not working, the vehicle needs a Social, Domestic & Pleasure policy so the owner can drive the vehicle during their off hours.
This sector is currently dominated by the originator of this insurance Zego. They offer courier cover for scooter, private hire and recently bicycle insurance. Pay-as-you-go insurance can operate one of two ways. You can choose pay-per-mile or pay-how-you drive insurance. The broker in both cases wishes to determine the risk that you pose. If you work part time with low miles or the block box readings indicate that you are as a good safe driver, the premium will be reduced.
Pay-as-you-go car insurance for young drivers
Younger drivers could indeed save money by switching to a pay-as-you-go model. However if you are under 25 you may still find it difficult to find a broker that will accept you this type of scheme. Most brokers currently only accept driver that are 25 and over.
What is required by UK law?
A standard type of Social, Domestic & Pleasure policy is required by law for any private motor vehicle. For couriers they must also take out a hire and reward policy which is also referred to as the pay as you go food hire and reward insurance insurance.
The standard Social, Domestic & Pleasure policy (SD&P) can be Third Party, Third Party Fire and Theft or a comprehensive policy.
The pay as you go food delivery insurance is the least expensive way to cover a vehicle and still deliver food. This type of policy is used by both full and part time couriers, so they will be in compliance with the law.