Pizza Delivery Costs 1,500 Bucks?
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Pizza Delivery Costs 1,500 Bucks?
Lu Ann Cahn and the NBC 10 Investigators expose the truth behind pizza policies
By LU ANN CAHN and JACKIE MORLOCK
Updated 12:22 PM EDT, Tue, Feb 24, 2009
Where do you order your pizza? Papa Johnâ€™s? Domino’s? Pizza Hut? It doesnâ€™t matter. They all have similar policies that only require their pizza delivery drivers to have state minimal Personal Auto Liability coverage.
Pretty much, your pizza delivery could cost you more dough than you called for if one of those drivers hits your car.
Take Amber McQuigon for example. All she wanted was some extra cheese and pepperoni pizza from Papa Johnâ€™s. What she got was a $1,500 bill after her pizza deliveryman dented and scratched her car. The driver had car insurance, but not the kind thatâ€™ll cover pizza delivery. Now, Amber is left with a mucked up car and a beefy bill. Thatâ€™s when she called Lu Ann Cahn and the NBC 10 Investigators.
The NBC10 Investigators found out this problem spreads way beyond your pizza person and herein lies the problem. It doesnâ€™t matter what kind of delivery drivers are doing, whether itâ€™s newspaper delivery, pizza delivery or whatever, the person behind the wheel needs to have a commercial auto policy.
But, commercial auto policies cost about 30 percent more than minimal liability coverage, according to insurance companies like Progressive.
â€œIf my driver is only making $50 a week and is paying $200 extra for insurance for delivery, I donâ€™t know how many drivers I would have,â€ a Papa Johnâ€™s spokesperson said.
In a national survey of pizza restaurant owners, over 70-percent said they only require employees to show proof of insurance, which means drivers can have the cheapest coverage possible. Thirteen percent of restaurant owners donâ€™t even ask at all! They have a "Donâ€™t ask , donâ€™t tell " policy. Only 16 percent of restaurant owners said their company provides insurance for delivery vehicles.
â€œIt is irresponsible corporate citizenship to do this kind of thing, to put on your employees the responsibility to buy minimum insurance coverage and not protect the public,â€ Trial lawyer Tom Kline told Cahn.
In a bad accident, this pizza policy probably wouldnâ€™t hold up in court, Kline went on to say. His position: companies should be insuring the drivers and taking responsibility.
On Monday, November 17, Papa Johnâ€™s informed the NBC10 Investigators that the company will now pay for Amberâ€™s expenses.
Papa Johnâ€™s and Dominoâ€™s both say they can use their own liability insurance if their drivers are not properly covered, Cahn reported. So far, there has been no word from Pizza Hut.
Without getting the full 55 cent per mile IRS mileage rate the DOL says is required to be paid in minimum wage situations, most delivery drivers find it hard to ‘make it pay’ while carrying the recommended ‘commercial vehicle insurance’. Many drivers therefore choose to just risk it without the expensive additional insurance just to make ends meet.
Because of this and other reasons it is very important that businesses also carry ‘non owned vehicle’ insurance coverage that covers situations such as this.
I recommend that businesses pay delivery drivers the full IRS mileage rate of 55 cents per mile because it is just the right thing to do if paying someone else to represent your business and deliver your product using their private vehicle. In minimum wage situations, the DOL advises that the full IRS rate be paid to ensure no ‘out of pocket expenses’ are borne by the delivery driver which would reduce their net income below minimum wage and expose your business to possible fines.
Pay drivers fairly for the use of their vehicles or ‘a penny saved may become a million burned’.