Buy Cheap Auto Insurance for Self-Employed Workers in 2024

Being a self-employed person offers incredible benefits. You can be your own boss, develop your own schedule, and choose your hours. But how does being self-employed impact your insurance costs?

For many auto insurance companies, a person’s occupation is one factor in determining how much they will pay for coverage. In addition, insurance companies use a person’s occupation to help calculate risks and determine overall rates.

If you need insurance as a self-employed contractor or are self-employed, you should research different companies online to see which will offer you the auto insurance coverage you want at a price that works with your budget.

How much is car insurance if I’m self-employed?

The cost of auto insurance for self-employed people varies due to many factors. When determining your car insurance rates, most companies consider your occupation, among other things, including:

• Age
• Gender
• Marital status
• ZIP code
• Driving history
• Credit history
• Coverage types

There’s no way to know exactly how much you will pay for coverage until you shop online and compare quotes based on your unique information. 

As a self-employed individual, you may wear many hats in your career. And while many people assume a self-employed person always works from home, this is often not the case. For example, many self-employed people have jobs and tasks that involve a good bit of driving, including:

• Running business errands
• Carrying tools
• Transporting people or equipment
• Driving to different worksites 
• Delivering food or other goods

If you consistently do any of these things for work, you will want to be sure you purchase an auto insurance policy that will cover you in the event of an accident. 

Read more: Buy Cheap Auto Insurance for Food Delivery Drivers

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Do I need full coverage if I’m self-employed?

If you work for yourself and work occurs mainly at home, you may be able to get away with a liability-only auto insurance policy. But if your job requires driving to and from different locations rather often, a full coverage auto insurance policy, or in some cases a commercial auto insurance policy, will help you ensure you’re always protected.

Full coverage includes two coverages and your state’s liability coverage requirements. These two coverages are collision and comprehensive insurance. Collision insurance will help you if you’re in a car accident and your vehicle is damaged, even if you are at fault.

Comprehensive auto insurance covers your vehicle if it is damaged in a non-accident-related incident. These incidents often result from theft, vandalism, inclement weather, or similar occurrences. 

You can assess your driving to decide whether a full coverage policy is right for you. Additionally, you can compare costs with multiple insurance companies to see if there’s one that will offer you cheap monthly or annual rates.

Do self-employed people need commercial car insurance?

Many insurance companies will not cover you or any items in your vehicle if you drive for work purposes. And while there may be simple ways to distinguish the difference for people who work traditional jobs, it can be challenging to do so if you’re self-employed.

If you regularly transport items, deliver food or other goods, transport people or patients, or run errands for work, you may find that you need a commercial auto insurance policy.

Self-employed small business owners can purchase a commercial auto insurance policy or a policy for personal business use from many insurance companies. But it will depend on what you do for a living and whether these coverages will work for you.

Personal business use policies are more common for self-employed people, but you may find that rates are a bit more expensive than what you are used to paying. Still, it’s a good idea to speak with a representative from your insurance company to ensure you’ll be covered if you’re ever in an accident. 

What should I do if I’m a rideshare or delivery driver?

If you drive for Uber, Lyft, or another rideshare company, or if you deliver food or other goods for a company, you are only legally required to carry your state’s minimum level of liability insurance. The table below shows liability requirements in each state.

Minimum Liability Auto Insurance Coverage Requirements by State

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In addition, some rideshare and delivery companies offer their employees — who are technically considered independent contractors — commercial coverage when they are actively working. With regards to insurance for self-employed contractors, it will generally be something the company states up front. If this is the case for your job, you may not need to purchase commercial auto insurance for work.

But it would still be a good idea to consider a full coverage policy on your vehicle for the times you’re driving that are unrelated to your job.

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Is car insurance tax deductible for self-employed people?

If you are self-employed, it may be possible to claim your car insurance on your taxes. If you drive for work and your insurance is necessary for your job, you can consider it a business expense.

You should be able to receive at least a small tax credit when you file your tax return. Discuss your car insurance policy with a tax professional before doing so.

Can I find cheap car insurance if I’m self-employed?

Self-employed people may be able to find cheap car insurance coverage in a few different ways.

First, if your income is relatively unpredictable, or if you have a particular season as a self-employed person during which you may have more money, you may want to consider alternative billing cycles. 

An alternative billing cycle typically allows you to pay once a year, every six months, or monthly. You may find an insurance company that allows you to choose which cycle works best for you based on your income. More often than not, you can save a small percentage on your car insurance if you pay in full once a year.

Another great way to save on coverage if you’re self-employed is to consider discounts. Some of the most popular discounts on car insurance include:

• Good driver
• Safe driver
• Multi-policy
• Multi-vehicle
• Autopay
• Good student
• Safe driving
• Affinity membership

If you believe one or more of the discounts above may apply, you can speak to the insurance company to determine whether you are eligible.

But the best way to save on car insurance is to compare auto insurance quotes from multiple providers online. Comparing quotes can help you discover which company will offer you the coverage you need as a self-employed individual at a price you can afford. 

Car Insurance for Self-Employed People: The Bottom Line

If you are self-employed, you must carry an auto insurance policy that meets your state’s requirements for liability. However, most people would benefit from having a full coverage policy on their vehicle. Full coverage will protect you if you’re in an accident and will also pay to repair your car if it’s damaged by inclement weather, theft, and more. 

You may need a commercial car insurance policy if you drive a lot for work and transport items or people. In addition, if you’re an independent contractor for a delivery company or rideshare group, you may have access to that company’s commercial insurance when you’re actively working.

To find cheap car insurance as a self-employed individual, you can explore alternative billing differences, look for specific discounts, and compare quotes from multiple insurance companies online.

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