There are many factors that affect your car insurance rates. And while being self-employed will be a factor in whether your rates go up, down or stay the same; what really impacts your insurance rates is what type of business you do as a self-employed individual.

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Let’s delve in a little deeper into being self-employed and what effects it may have upon your auto insurance rates. This is not a simple answer, and so breaking down all aspects of self-employment should clarify what options may arise from your car insurance coverage.

Should I tell my car insurance provider that I am self-employed?

Absolutely, you should. If you don’t let them know that your self-employed and you get into an accident or your car gets broken into while you are working, they don’t have to cover the expenses if you didn’t inform them of your change in status. The potential increase in premium is a small price to pay for peace of mind, and having any goods your carry for your work covered in the case of a robbery of unfortunate auto collision.

Why can my car insurance go up if I am self-employed?

There are a number of factors that cause your insurance premiums to go up if you are self-employed. Here are two of the big ones:

• If your business requires you to travel long distances or be on the road a lot, than this can potentially increase your insurance rates.
• If you routinely carry expensive or large items in your vehicle, this could be a reason that your car insurance rates need to be increased. And even if what you haul in your car isn’t too expensive an item, just the fact that having certain objects in your car on an on going basis lends itself for a potential thief to break in and steal these goods; hence, once again potentially having your auto insurance premiums to be above their current rate.

Even though you may drive a car that is not on the frequently stolen cars list, your lifestyle and habit can change those statistics.

Do I need commercial insurance now that I am self-employed?

If you use your car or truck to drive to accounts, deliver goods, pick up clients, haul materials, and make sales calls then you absolutely need to get commercial car insurance. Although there are some instances and types of work that you won’t need commercial insurance for, most times you will need to transition from personal to commercial vehicle insurance.

Also, now that you are working for yourself, you need to keep in mind that if you are in an accident while in the midst of a job, and the incident is found to be your fault, the other party can go after both you and your business. So it is paramount that you have enough liability and comprehensive insurance not only for your vehicle and the goods you may carry in you vehicle, but for the unfortunate accident you may be embroiled in.

If your spouse or relative helps you in your business from time to time and uses your vehicle then he or she should be put down as an individual on your commercial car insurance plan.

Is it important to keep a mileage journal now that I’m self-employed?

This is good for two reasons:

• Tax purposes
• Potentially lowering your car insurance premiums

In order to reap the tax benefits of working for yourself, it is good practice to make a detailed driving log to account for the mileage and upkeep of your vehicle related to your business. Also, by keeping an accurate driving journal this can be a key component in lessening your auto insurance rates. Even though you may have to drive for business from time to time, if this driving is now less than what your were doing when you were employed by a company it may help you reduce your auto insurance premiums a bit.

Is there a way my insurance can go down if I am self-employed?

Actually, there is a way. If your business is one you do completely from home, where you don’t need to make outside sales calls, see clients in person, deliver products, or pick up co-workers, than you may see your premiums decrease.

The reason for this potential lessening in car insurance rates is that where before, when you worked for someone else, you most likely drove at least to and from work everyday. You no longer have that daily commute. Thus, the amount of mileage you are putting on your car has been drastically decreased, and should result in a lower premiums more times than not. Car insurance companies like this lessened risk and will reward you for it.

If you are planning to become self-employed then you need to compare the car insurance quotes of many prominent U.S. providers by typing in your zip code below!