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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.
Car insurance companies take the following factors into consideration when setting your rates:
While being self-employed doesn’t typically come with its own set of driver discounts, here are some ways to save:
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.
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.
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.
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.
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