Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Oct 5, 2020

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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.

Here's what you need to know...

  • Your car insurance rates may increase if you drive a lot or carry work-related equipment in your vehicle.
  • You car insurance rates may decrease if your self-employment allows you to drive less.
  • You should look into switching from a personal to a commercial car insurance policy.
  • It is important to keep a vehicle log – it could help you save on your insurance premiums.

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.

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

Just type your ZIP code into the FREE box at the top of this page to get online car insurance quotes right now!

Table of Contents

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

Absolutely, you should. If you don’t let them know that you’re self-employed and you get into an accident or your car gets broken into while you are working and your work related items are damaged or stolen, your insurance doesn’t have to cover the work-related expenses.

The potential increase in premium is a small price to pay for peace of mind and reimbursement of any stolen or damaged items you carry for work in the case of a robbery or an unfortunate auto collision.

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Is car insurance more expensive if you are self-employed?

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

  1. Long-distance road travel – If your business requires you to travel long distances or be on the road a lot, this can potentially increase your insurance rates.
  2. Carrying expensive items – 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.
  3. Extra items consistently carried – 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 ongoing basis lends itself to a potential burglary could, once again, potentially increase your premiums

Even though you may drive a car that is not on the frequently stolen cars list, your lifestyle and habits can change to accommodate being self-employed and this can change your car insurance premiums.

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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 coverage.

Although there are some instances and types of work where you won’t need commercial insurance, most times you will need to transition from personal to commercial vehicle insurance.

When making your decision, here are some factors to consider:

  • Now that you are working for yourself, 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.
  • It is paramount that you have enough liability and comprehensive insurance not only for your vehicle and the goods you may carry inside but also for any accident you may cause.
  • If your spouse or relative helps you in your business from time to time and uses your vehicle, 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?

Yes! It is good for two reasons:

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 as it relates to your business.

Also, keeping an accurate driving journal can be a key component in lessening your auto insurance rates.

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

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

You may see a decrease in premiums working from home when you drive less than you did working for someone else.

You no longer have that daily commute. Thus, the mileage you are putting on your car has been drastically decreased and should result in 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!