Insurance for Self-Employed People

When you're self-employed, you'll want to know that you're getting yourself the best in terms of auto coverage. We'll cover what you should do when you're self-employed and looking for auto insurance.

UPDATED: Jul 9, 2022Fact Checked

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Written by Sara Routhier
Director of Outreach Sara Routhier

Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent Cynthia Lanctot

UPDATED: Jul 9, 2022

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our auto insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different auto insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A Concise Overview

  • Car insurance rates for self-employed people vary based on many different factors
  • You may need to consider a commercial auto insurance policy if you drive a lot for work
  • There may be ways for you to pay less for car insurance as a self-employed individual

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. 

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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
StatesInsurance Coverage Required Minimum Liability Limits
AlabamaBodily injury and property damage liability25/50/25
AlaskaBodily injury and property damage liability50/100/25
ArizonaBodily injury and property damage liability15/30/10
ArkansasBodily injury and property damage liability, Personal injury protection (PIP)25/50/25
CaliforniaBodily injury and property damage liability15/30/5
ColoradoBodily injury and property damage liability25/50/15
ConnecticutBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/20
DelawareBodily injury and property damage liability, Personal injury protection (PIP)25/50/10
Washington, D.C.Bodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/10
FloridaBodily injury and property damage liability, Personal injury protection (PIP)10/20/10
GeorgiaBodily injury and property damage liability25/50/25
HawaiiBodily injury and property damage liability, Personal injury protection (PIP)20/40/10
IdahoBodily injury and property damage liability25/50/15
IllinoisBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/20
IndianaBodily injury and property damage liability25/50/25
IowaBodily injury and property damage liability20/40/15
KansasBodily injury and property damage liability, Personal injury protection (PIP)25/50/25
KentuckyBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist25/50/25
LouisianaBodily injury and property damage liability15/30/25
MaineBodily injury and property damage liability, uninsured motorist, underinsured motorist, medical payments (MedPay)50/100/25
MarylandBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist30/60/15
MassachusettsBodily injury and property damage liability, Personal injury protection (PIP)20/40/5
MichiganBodily injury and property damage liability, Personal injury protection (PIP)20/40/10
MinnesotaBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist30/60/10
MississippiBodily injury and property damage liability25/50/25
MissouriBodily injury and property damage liability, uninsured motorist25/50/25
MontanaBodily injury and property damage liability25/50/20
NebraskaBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/25
NevadaBodily injury and property damage liability25/50/20
New HampshireFinancial responsibility only25/50/25
New JerseyBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist15/30/5
New MexicoBodily injury and property damage liability,25/50/10
New YorkBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist25/50/10
North CarolinaBodily injury and property damage liability, uninsured motorist, underinsured motorist30/60/25
North DakotaBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist25/50/25
OhioBodily injury and property damage liability25/50/25
OklahomaBodily injury and property damage liability25/50/25
OregonBodily injury and property damage liability, Personal injury protection (PIP), uninsured motorist, underinsured motorist25/50/20
PennsylvaniaBodily injury and property damage liability, Personal injury protection (PIP)15/30/5
Rhode IslandBodily injury and property damage liability, Personal injury protection (PIP) 25/50/25
South CarolinaBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/25
South DakotaBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/25
TennesseeBodily injury and property damage liability25/50/15
TexasBodily injury and property damage liability, Personal injury protection (PIP)30/60/25
UtahBodily injury and property damage liability, Personal injury protection (PIP)25/65/15
VermontBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/10
VirginiaBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/20
WashingtonBodily injury and property damage liability25/50/10
West VirginiaBodily injury and property damage liability, uninsured motorist, underinsured motorist25/50/25
WisconsinBodily injury and property damage liability, uninsured motorist, medical payments (MedPay)25/50/10
WyomingBodily injury and property damage liability25/50/20
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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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