Auto Insurance for Self-Employed People

Auto insurance for self-employed people may be a personal policy or you might need business car insurance for self-employed individuals. Basic personal car insurance for self-employed people can average around $166/mo. to to $500/mo. based on many factors. Auto insurance may be tax-deductible if you're self-employed.

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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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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

UPDATED: Mar 30, 2021

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A Concise Overview

  • Choosing a commercial or personal auto insurance policy depends on how much you use your vehicle for work.
  • Most rideshare companies consider their drivers “independent contractors,” which means they are self-employed.
  • Some auto insurance policies exclude their drivers from driving for rideshare companies.

Being self-employed doesn’t always mean working from home. Many self-employed people work jobs that require plenty of driving, with some using driving as their primary business. In our guide, we’ve provided information on auto insurance coverages for self-employed people.

There are many different options when looking for auto insurance for self-employed people, though it all depends on how you’ll be using your vehicle for your business. For example, if you have a van or other type of vehicle primarily used for business, you will likely need commercial auto insurance.

It’s also a good idea to determine your self-employed car expenses, which could include regular maintenance to a heavily used vehicle or constant cleaning services. These are all things that can be discussed with an insurance agent, but it’s important to have a good idea about what you need first.

Read on for more information about car insurance for self-employed people and use our helpful tool to compare auto insurance rates and find the most affordable car insurance.

Is a personal auto insurance policy enough if you’re self-employed?

Is self-employed car insurance the same as a basic auto insurance policy? It can be. If you are using your vehicle for business minimally, then you’ll likely be fine with a basic auto insurance policy, but this all depends on your specific needs and wants.

Your personal vehicle is the vehicle you use to go just about everywhere, so picking the right insurance policy is important. There are many different auto insurance options, however, most basic coverage plans come with bodily injury liability, property damage liability, personal injury protection, uninsured/underinsured motorist, collision, and comprehensive.

Rates for basic insurance policies can differ greatly based on many factors, including your age, gender, driving record, and more. The type of vehicle you drive can be a big factor when determining your rates as well. For example, we’ve included a chart below that shows average annual rates based on age and gender.

Average Annual Auto Insurance Rates by Age and Gender
CompaniesSingle 17-Year-Old Female RatesSingle 17-Year-Old Male RatesSingle 25-Year-Old Female RatesSingle 25-Year-Old Male RatesMarried 35-Year-Old Female RatesMarried 35-Year-Old Male RatesMarried 60-Year-Old Female RatesMarried 60-Year-Old Male Rates
USAA$4,807.54$5,385.61$1,988.52$2,126.14$1,551.43$1,540.32$1,449.85$1,448.98
Geico$5,653.55$6,278.96$2,378.89$2,262.87$2,302.89$2,312.38$2,247.06$2,283.45
Nationwide$5,756.37$7,175.31$2,686.48$2,889.04$2,360.49$2,387.43$2,130.26$2,214.62
State Farm$5,953.88$7,324.34$2,335.96$2,554.56$2,081.72$2,081.72$1,873.89$1,873.89
American Family$5,996.50$8,130.50$2,288.65$2,694.72$2,202.70$2,224.31$1,992.92$2,014.38
Farmers$8,521.97$9,144.04$2,946.80$3,041.44$2,556.98$2,557.75$2,336.80$2,448.39
Progressive$8,689.95$9,625.49$2,697.73$2,758.66$2,296.90$2,175.27$1,991.49$2,048.63
Allstate$9,282.19$10,642.53$3,424.87$3,570.93$3,156.09$3,123.01$2,913.37$2,990.64
Travelers$9,307.32$12,850.91$2,325.25$2,491.21$2,178.66$2,199.51$2,051.98$2,074.41
Liberty Mutual$11,621.01$13,718.69$3,959.67$4,503.13$3,802.77$3,856.84$3,445.00$3,680.53
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As you can see, USAA offers the lowest rates in most cases.

Personal auto insurance policies might be the best way to have the cheapest car insurance, but the cheapest isn’t always the best, especially if you are using a vehicle primarily for business. You can easily calculate how much you should be paying for auto insurance by using our auto insurance calculator.

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Auto Insurance for Small Businesses

If you have a small business that uses one or more vehicles primarily for that business, it is required in most states to have commercial auto insurance.

Commercial auto insurance can cover a litany of different things, including vehicle damage caused by vandalism, collision, weather, and more. Some commercial auto insurance policies can also cover thefts. Additionally, since there is a huge difference in auto insurance coverage needs between different businesses, some insurance companies offer customizable commercial auto insurance plans.

As with most types of auto insurance, you will likely be required to pay a deductible when filing a claim for commercial auto insurance. Deductibles are something that should be discussed with your insurance agent before deciding on a policy, as it is important to be prepared for any situation.

You may need business car insurance if you’re self-employed even if you are just a contractor. Car insurance for self-employed couriers, for example, is sometimes a business or commercial policy.

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Auto Insurance for Uber, Lyft, & Other Rideshare Drivers

These days, most rideshare companies — including Uber and Lyft — consider their drivers “independent contractors,” meaning that they are technically self-employed. That being said, most of these rideshare drivers use their own, personal vehicles.

This means that you’ll have to consult your insurance company if you plan on driving for a rideshare company, as more time on the road means a greater chance of having an accident.

Some auto insurance policies exclude their drivers from driving for rideshare companies, so you may need to update your policy. Many auto insurance companies offer a form of additional coverage to those driving for rideshare companies.

Take a look at this video from Allstate to see what its rideshare insurance covers.

Additionally, many rideshare companies offer a supplemental type of auto insurance coverage. Uber, for example, offers supplemental coverage that is only in effect when the Uber app is on.

Uber’s supplemental insurance provides $50,000 in bodily injury per person, $100,000 in bodily injury per accident, and $25,000 in property damage per accident. It’s a good idea to ask about your rideshare company’s insurance coverage before agreeing to drive for them.

If you’re wondering whether you can write off auto insurance as a self-employed person on your taxes, read the section below.

Is auto insurance tax deductible if you’re self-employed?

Claiming car insurance for self-employed people is sometimes possible when doing annual taxes. This is because driving for work when you’re self-employed, and therefore car insurance expenses for self-employed people, can be considered a business expense. Deducting car insurance if you’re self-employed isn’t always allowed, however – it does depend on your job.

Many online tax reporting services, including TurboTax, include a section where you can input the amount you pay for auto insurance to receive a tax credit. If you’re using a tax professional, be sure to discuss your auto insurance policy with them.

How do I find auto insurance near me? It’s simple. Now that you know more about auto insurance for self-employed people, use our helpful tool below to compare rates offered by your local auto insurance companies.

References:

  1. https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

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