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Compare car insurance for self-employed drivers
Get the best rates while also protecting your business from lawsuits.
Being self-employed doesn’t affect your car insurance rates on its own, but what you do for a living can. The amount of time you spend in your car, who drives it and what you carry in your car can all factor into your insurance premiums.
You could leave your business exposed to lawsuits by relying on your personal auto policy to cover your vehicle for business use.
Compare car insurance for self-employed drivers
How does being self-employed affect the cost of my car insurance?
Car insurance companies take the following factors into consideration when setting your rates:
- How often you drive for work. If you work from home, you could pay less than someone who puts in daily miles to and from work or has to drive daily errands or deliveries.
- How far you drive. A self-employed driver who only commutes to and from a nearby coworking space will pay less than someone who consistently drives long distances.
- Transporting people. If your work requires that you drive clients or other passengers around, you could see your rates increase.
- Transporting cargo. Transporting expensive inventory can cause your insurance rates to rise.
How can I save on self-employed car insurance?
While being self-employed doesn’t typically come with its own set of driver discounts, here are some ways to save:
- Track your miles. Log your miles and keep your personal and work trips separate. Being able to show you don’t often use your car for business could help lower your rates.
- Find tax write-offs. Tracked miles, maintenance and insurance could be deducted from your yearly taxes. Be sure to keep a running percentage of how much you used your car for business.
- Don’t mix personal and business. If you drive your car almost exclusively for work, you might have a small personal mileage allowance. That allowance can be as low as 10%, and you could lose your business tax incentives if you use it up. Check laws in your state to maximize your tax savings.
What kind of coverage should I get as a self-employed driver?
If you work from home and don’t use your car much for business purposes, your personal insurance policy is probably fine. But if you mostly use your car for business, or if you have employees who also use it for business, consider buying a commercial insurance policy to help protect you from lawsuits.
It may cost extra, but you may find several discounts based on the policy you choose and the insurance company you work with.
- Bundling discount. If you purchase multiple insurance policies for your business from the same company, for example both a business owners and commercial auto policy, you may be able to bundle them together for a discount.
- Commercial business experience discount. Having a business that’s been open for three years or more can often reduce your insurance premiums.
- Commercial driver’s license (CDL) discount. If a vehicle you’re insuring requires a CDL to operate it, having a valid CDL could qualify you for a discount.
- Loyalty discount. If you’ve kept your policy with the same insurer for over a year, you can likely request this discount.
- Paid-in-full discount. If you pay your entire policy for the year up front instead of monthly, you can often discount your premium.
Case study
You send your assistant in your car to the next town over to pick up inventory, and they get in an accident on the way back. The car is totaled and the inventory is tossed into the road.
Your commercial auto policy covers the claim and damages. If you’d been relying on a personal policy, your coverage might have been minimal or denied, and your inventory definitely wouldn’t have been covered.
What should I watch out for when buying insurance as a self-employed driver?
Liability is the number one concern for self-employed drivers. Some personal policies may limit what they cover if you’re driving your vehicle for business purposes. And your liability in an accident may extend to your business, meaning a third-party may be able to sue your business for damages not covered by your personal insurance policy.
Bottom line
The type of insurance you need as a self-employed driver all depends on how you use your car related to business. You may think your personal policy is enough, but be sure to go over your coverage with an insurance agent to make sure you’re protected. And always shop multiple car insurance companies to make sure you’re getting the best deal for you.
Frequently asked questions about self-employed car insurance
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