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Car insurance for self-employed people

Occupation is used as a rating factor by car insurance companies when setting prices. Some car insurance companies award drivers in certain industries small discounts because of the correlation between the occupation and safe driving. Self-employed individuals and independent contractors typically do not fall into this category. Although you might not pay more for car insurance because you’re self-employed, it's always worth finding ways to save. Let's explore how to find cheap self-employed insurance for your vehicle. 


How does being self-employed affect car insurance?

This depends on your line of work and how your insurance company views that profession. See below average auto insurance premiums by occupation. If you’re a self-employed lawyer, you might see some insurance savings. However, if your insurance company conflates self-employed with unemployed for whatever reason, you see zero savings. Luckily, comparing car insurance quotes are free so you might still be able to find a company offering you better value.

Occupation Avg. Annual Premium
Teacher $1,438
Scientist $1,440
Military $1,440
Fire Fighter $1,445
Lawyer $1,447
Engineer $1,447
Doctor $1,450
Manager $1,451
Law Enforcement $1,457
Civil Servant $1,468
Unemployed $1,482
Proprietor $1,485
Updated: 11/29/22.

Dynamic auto insurance data methodology

Methodology: The auto insurance rates displayed above and throughout this page are dynamic, meaning the data will refresh when the most recent information is made available. Rates are based on a sample driver profile — a 30-year-old single male driver with a Honda Accord and full coverage. This profile was adjusted based on common pricing factors used by major car insurance companies, like age, coverage level, driving record and others.


Can you deduct your car insurance on your taxes if you’re self-employed?

If you use your vehicle for business purposes, you can deduct all necessary and ordinary costs relating to car insurance on your tax return. However, a business-use policy is non-standard. This doesn’t mean you drive your vehicle to and from wherever you are working. This means you use your vehicle your business and associated duties related to your business.

Below are average car insurance premiums by vehicle use.

Use of Vehicle Avg. Annual Premium
Business $2,012
Work $1,787
Pleasure $1,760
Farm $1,660
Updated: 11/29/22.

You can find more information, check out our guide relating to car insurance and tax deductions.

Self-employed commercial car insurance

As a self-employed small business owner, you can either get a commercial policy or a personal business use policy depending on what you do for a living. Commercial auto insurance is not sold by all major insurers. Personal business use policies may be more widely used among self-employed workers, although they may be slightly more expensive. If your vehicle is widely used in your profession, commercial car insurance will likely be required. Commercial car policies include liability, physical damage coverage, Medpay, PIP, and uninsured motorist. 

The following are a few of the most common business activities that require a commercial auto insurance policy.  

  • To run business errands
  • To carry tools
  • To transport equipment or people
  • To drive to worksites 
  • To deliver goods or food
  • Or if the vehicle is titled to a business

 

Get started by receiving a commercial auto insurance quote from our trusted partner, Progressive.

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How to save on car insurance if you’re self-employed

If you’re a freelancer, your paychecks could be inconsistent. This can make it tricky to stick to a monthly billing plan — especially if your premiums are high. Let’s explore some ways to lower your car insurance premium.

 

Explore alternative billing cycles

Depending on your state and your car insurance company, you might have some flexibility in setting a payment plan. Certain insurance providers offer multiple billing plans, including 1-pay, 2-pay, 4-pay, and monthly.

  • 1-pay:  Otherwise known as paid in full, you pay for your entire six-month premium upfront. This will usually earn you a discount.
  • 2-pay:  Similar to how it sounds. You pay half your premium at the start of your policy, and the next halfway through.
  • 4-pay:  Your six-month premium is divided into four installments.
  • Monthly Plan:  Standard billing system, you pay your car insurance premium once a month.

Again, the availability of the 2- and 4-pay plans depend on a number of factors. Your current provider might have a non-standard, non-monthly schedule that could work for you. Speak to your insurance agent about alternative billing cycle availability.

 

Don’t pay for coverage you don’t need

If your vehicle is worth less than $4,000, consider dropping collision and comprehensive coverages. These coverages are not required by any state’s insurance laws and tend to be expensive. If you’re unsure about the value of your vehicle, use Kelley Blue Book to determine the value.

 

Use your collision coverage sparingly

Unless you have accident forgiveness built into your insurance policy, all insurance companies will charge you an accident surcharge for up to three to five years after you file a claim. This could increase your premium by an average of $617 per year. See below how much this could cost over three years.

Years After Accident Premium Increase
0 $0
1 Year +$617
2 Years +$1,234
3 Years +$1,851

If you’re unsure about whether to file a claim, follow this workflow:

  1. Get an estimate for the value of the repairs, out of pocket.
  2. Use our State of Insurance study to see by how much an at-fault claim would raise rates in your state.
  3. Compare the value of the rate increase over three to five years (plus your deductible) to the out-of-pocket expenses determined in step 1. If it is cheaper to file a claim, do that.

Double-check for discounts

Earning a multi-policy discount won’t save you a tremendous amount of money but it can be useful. Below are some common discounts you might qualify for.

  1. Good/safe driver
  2. Multiple drivers
  3. Multi-vehicle
  4. Multi-policy
  5. Bank account autopay
  6. Paid in full
  7. Good student
  8. Telematics
  9. eSign
  10. Group participation/affinity membership discount
  11. Homeowner discount
  12. Green vehicle discount
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Compare insurance rates

Regardless of your employment status, the very best way to ensure you’re getting the best rate is to compare rates from as many insurance providers as possible. This allows you to compare and select the company that gives you the best coverage for the best price. Enter your ZIP code below to get started.

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About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.