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Auto Insurance for Independent Contractors (How to Save)
Things to Remember
- Did you know that insurance companies use your occupation as a factor when determining your auto insurance rates?
- Certain occupations will help you get a discount on your auto insurance because insurance companies associate these occupations with safe driving
- Being self-employed or an independent contractor will not typically help you get a discount based on your occupation, but this is not always the case. Depending on what you do for a living you could still save on auto insurance while being an independent contractor
Insurance companies look at a number of different factors when they are determining how much auto insurance will cost you. However, did you know that your occupation also affects your auto insurance?
Auto insurance for independent contractors doesn’t necessarily cost more than auto insurance for other occupations, but some insurance companies may deem you as unemployed based on what your profession is. This determination could affect your auto insurance rates.
Also, if you’re using your vehicle for business, you will need to look into business use of personal vehicle insurance for your car to ensure that you are staying compliant with all auto insurance laws in your locality.
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Is auto insurance more expensive for independent contractors?
The answer depends on your occupation, and if you intend for business use of your car. For example, if you are an independent contractor who is a lawyer, you will likely be able to get better cheap auto insurance rates than an independent contractor who is a delivery driver.
Some auto insurance companies may even label you as unemployed if you are an independent contractor and they cannot verify your work or income. However, you should be able to clear this up with your insurance agent by providing them with more information and financial documents.
Many people are unaware that their occupation can actually affect their auto insurance rates. Below you can see how much auto insurance costs on average for each occupation.
Average Annual Auto Insurance Costs by Occupation
| Occupation | Average Annual Rates | Savings vs. Unemployed Auto Insurance Rates |
|---|---|---|
| Unemployed | $1,417 | -- |
| Other | $1,416 | $1 |
| Proprietor | $1,416 | $1 |
| Civil Servant | $1,410 | $6 |
| Manager | $1,402 | $14 |
| Law Enforcement | $1,388 | $28 |
| Teacher | $1,388 | $29 |
| Firefighter | $1,385 | $31 |
| Doctor | $1,382 | $34 |
| Scientist | $1,382 | $35 |
| Lawyer | $1,381 | $36 |
| Engineer | $1,381 | $36 |
| Military | $1,374 | $43 |
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The way your auto insurance company handles your position as an independent contractor will depend largely on what you do for a living and how you intend to use your car.
Can independent contractors use their personal vehicles for business purposes?
Yes, you can use your personal vehicle for business purposes, but this may affect your auto insurance policy and annual costs. For example, if you are using your vehicle to commute to a job site, you won’t need to get any additional auto insurance as an independent contractor.
However, if you are using your car to complete your work duties or your car is an essential part of your business activities, you will need to get a commercial auto insurance policy or a personal business use auto insurance policy as explained by the Insurance Information Institute.
The best example is food delivery. If you are working as an independent contractor for Uber Eats, Grubhub, or DoorDash, you will need to get additional food delivery auto insurance coverage.
Another type of gig-based contractor who should be aware of these requirements is those who are driving for Lyft or Uber insurance requirements. These drivers can benefit from rideshare insurance, but the insurance provided by these ridesharing companies may not provide as much protection as you need.
If you are an independent contractor and plan to use your car for business purposes be sure to check with your insurance company. If they find out you lied or omitted information about how your vehicle would be used they could drop your auto insurance coverage.
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How can independent contractors save on auto insurance?
You can always ask your auto insurance company about available discounts. Here are a few of the more common discounts that you may be eligible to receive.
- safe driver
- good student
- multi-driver
- multi-policy
- green vehicle
- paid in full
Of course, there are many other possible discounts that you may be eligible to receive including discounts for customer loyalty. Be sure to check with your auto insurance agent to be sure you are getting the lowest rates possible.
If you’re ready to start comparing auto insurance rates for independent contractors, enter your ZIP code below. Find and buy cheap auto insurance for independent contractors.
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