A Guide To Auto Insurance For Self-Employed

Although many people had to apply for new jobs if they had been laid off during the COVID-19 pandemic, others went down the self-employment route. The advantage of being your own boss is that it allows you to be creative in your chosen vocation and gives you the independence to be your own boss.

If you are self-employed, a car is one of those assets that you need to run errands for business and make your mobility a little easier. Whether you use it for business or personal reasons, taking out an auto insurance cover could help with financial safety in case of an accident or business continuity.

There are a few things regarding auto insurance that you need to consider when going self-employed. Here’s a comprehensive guide to auto insurance for the self-employed:

1. Types of Auto Insurance

Like most insurance policies, there are various types of coverage you can take for your car, yourself and your business. The type of auto insurance you’ll need will depend on the reasons why you’re using the vehicle.

1.1 Personal Auto Insurance

When you drive a car, there is always a risk of getting into an accident. With personal auto insurance coverage, in the event something goes wrong, you don’t have to worry how much you’ll need to pay for repairs, or worse, compensation due to injury in a traffic collision.

1.2 Commercial Auto Insurance

Even though you may have personal auto insurance, you may want to look into commercial auto insurance to check whether you’re covered for business reasons. If your work demands that you frequently use your car for work-related reasons, you should change to commercial auto insurance.

Commercial auto insurance covers you in the event of certain accidents and other business-related risks should something unexpected happen while at work. This includes medical payments, work injuries, and property damages awards up to limits set by law. Your personal insurance might not cover your business travel. As a result, it can put you at huge financial risk.

1.3 Rideshare Insurance

Rideshare services are a more specialist area when it comes to auto insurance. Even if you’re employed, your personal insurance may not cover rideshares. Plus, your employer may only cover certain events.

In the taxi business, some ridesharing insurance companies may only offer coverage when a passenger is on a trip. Therefore, insurance might not apply when the driver is waiting for a client request.

The best solution to this is to discuss what kind of coverage you require with your insurance provider. Insurance for taxis or couriers is often offered as a special package rather than a general plan.

2. Factors Affecting The Cost Of Auto Insurance

Depending on several factors, your auto insurance costs could work out less or higher if you’re self-employed. Insurance premiums are commonly affected by things like where you live, your claim history and car type:

2.1 Coverage Taken

Your auto insurance premium’s cost may depend on your coverage. Most areas have special requirements for certain liability coverage, including comprehensive, uninsured/under-insured motorist and collision coverage.

Auto insurance coverage may also include medical costs or personal injury protection coverage. Other optional safeguards include towing and labour costs and rental reimbursement coverage.

2.1 Driving History

Sometimes, you may wonder how long for car insurance your provider may review your driving history when determining premiums. Usually, your auto insurance may cost more if you have a history of accidents more than someone with a clean driving record. Also, you may be charged extra for auto insurance if you’re new as a driver with commercial vehicles or have never had personal auto coverage before.

2,3 Type of Car

Certain cars may cost more to insure due to their market value and ease of repair. However, you may be eligible for discounts on your car insurance premium if the same car has integrated security features. For example, like a tracker, that reduce the risk of theft.

2.4 Your Age

Your age may also determine your auto insurance premium. The younger you are, the less experienced your insurer might perceive you to be. According to a UN report, automobile accidents are the leading cause of death among young people. If you are within this youth group, the insurer may charge you more for car insurance than older drivers.

2.5 Frequency of Driving

Self-employed individuals may drive more for business meetings, to deliver goods, or visit clients. The frequency of automobile usage is usually a factor for insurers. The more time you spend driving, the more you and the car could be exposed to risks, leading to a higher auto insurance premium.

2.6 Your Residence

The cost of auto insurance may also be subject to the security of where you park your vehicle and the neighbourhood you live in. Accidents and vandalism are mostly reported in urban neighbourhoods. If your business and residence are around these places, the premium may be higher than in rural setups.

2.7 Credit Score

Credit-based insurance is very common nowadays, encouraging the insured to avoid accident claims in a policy year. Hence, many auto insurance firms could rely on your credit scores when calculating your premium. Your credit history may be used to predict whether you are likely to file a claim.

3. Ways You Could Cut Your Auto Insurance Costs

Insurance premiums for automobiles are not cast in stone. Depending on your relationship, market intelligence and other information, you might have a way to negotiate a lower premium. Here some ideas to help you cut your auto insurance costs:

3.1 Shop Wisely

Shopping around for the best rates and comparing the auto insurance premiums from different companies is essential. You may also use the quote from one company to negotiate a better rate with another. In addition, many carriers may offer different levels of coverage for their clientele which is essential when selecting one based on your needs.

3.1 Ask for Discounts

Some companies may offer discounts to those clients that didn’t make an auto insurance claim during past policy years. You can take advantage of such offers as failure to do so could make the provider charge you the market rate.

3.2 Bundle Policies

Insurers often offer discounts if you bundle your car, home and life insurance policies. It means buying all three in one go rather than separately. Hence, this may result in lower premiums overall because each policy may have its unique discount rate. Comparing prices is also good when bundling plans to ensure you pay the least overall.

3.1 Lower the Deductible

Selecting a greater deductible and ensuring that your employed driver is careful and experienced to avoid accident claims can save you on premiums. However, you need to save enough money to cover your deductible if you ever need to make a car insurance claim.


When determining the pricing for your auto insurance, insurance companies consider several factors that relate to your self-employment. Insurance companies may offer some discounts based on your driver’s professionalism and safe driving skills to your past relations.

Even though being self-employed may only sometimes result in higher auto insurance rates, it is always worthwhile to research ways to cut premium costs. Bundling all your personal and business insurance policies in one company may offer you competitive rates.



About Karina Bloom