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self employment office

A lot more people now that have ventured out in starting their own business. Many of these self-employed. It raises the question about what kind of vehicle insurance do they need. The answer can be a little challenging. Its based on several different circumstances.

Is The Car Going to Be used For the Business?


Insurance Companies ask this question. It requires careful thought. Many people use their vehicles for their self-employed business.  The use for business purposes may not be realized. For example, they may run small parcels to the post office every day. Therefore it is in relation to their business.

A lot of self-employed people run their business from home. They may use their car at various times throughout the day for business purposes. Assumptions are made that the vehicle is not classed as one that’s used for commercial purposes.

Assess the Vehicle Use For Business Purposes

Self-employed individuals need to do their own assessment. Furthermore, they should focus on how much the vehicles used for business purposes.  Especially as it will help to provide accurate information when shopping for Insurance. It may be the vehicle is only being used once or twice a day for short driving distances for errands. Or, it may be an individual provides services which mean they are driving the majority of the day.

Also, what needs consideration is whats being transported in the vehicle. One type of self-employment business may be the delivery of items. The type of items that are transported will be important to the Insurance Company. It can even include various types of equipment. For example, a mobile massage therapist would be carrying a specific type of equipment.

Each of these is going to be important factors that the Insurance company will consider.

It may be that the self-employed individual is claiming some of the car expenses for tax purposes. It would be a clear indicator that the vehicle is part of the business.

Do I need a commercial auto insurance policy

Every insurance company is different. They all have basic rules and regulations to follow that are set by the government. Aside from this, they each set their own rules. It means that they will vary in what type of insurance they will offer to their clients. They only determine this by taking into account many different factors. It includes those as outlined when assessing the vehicle used for business purposes.

Most likely the vehicle will need coverage under a commercial auto insurance policy. If the vehicle usage includes that for self-employed purposes.

Why Do Insurance Companies Want To Issue a Commercial Auto Policy?

Insurance companies will look for every possible risk that could cause them to pay out a claim.  And, risks are increased when a vehicle is used for business.

In a personal use circumstance, the vehicle is often driven to work and back.  Plus, the insurance company will factor the driving distance. Also, it will help to help set the premiums for this personal vehicle insurance.

Those that are self-employed may be driving more often throughout the day. The Insurance Companies feel each time the car’s driven, the risk of a collision is greater.

The equipment or items in the vehicle is another factor. Damage to it could occur in a collision. It could mean that the Insurance company has to pay for its repair or replacement. It is an extra cost to them.

Is Car Insurance More Expensive For Business Use?

business use


It could be that car insurance will be more expensive for business use. Again, it will depend on many factors. Also, the more risks this use of the vehicle is creating, the higher the premiums will be. The Insurance company will factor in all the information that’s given to them.

Insurance concerns are considered first. It is those that apply to personal insurance, which includes….

  • The age of the driver
  • Driving Experience
  • Where the driver resides
  • The make and model of the vehicle
  • Driving history

All the factors considered for the business use of the vehicle are the next level of concern. Therefore, these will vary according to the individual insurance companies.

How Much is Commercial Auto Insurance?

The cost of the commercial auto insurance will likely be higher. Especially when compared to the personal vehicle insurance. Therefore, how much higher will depend on all the variables. Yet, there are ways that the cost of this type of insurance can be lower.

Shopping for Commercial Vehicle Insurance


The first step is to shop for the right kind of commercial vehicle insurance. It can begin by getting insurance quotes. Furthermore, these quotes can are great for comparisons. And, after narrowing down the choices, the insurance shopper can do further research. It’s done by asking questions of the Insurance Company. Also, providing as much detailed information about the business usage helps. Furthermore, it helps the Insurance company to determine the best type of commercial coverage. It is based on the business use.

There are at least one important questions to ask the Insurance companies. One is what kind of benefits are available with the commercial vehicle insurance.

Some discounts you may want to ask about are….

Low mileage discount:

You may only be driving short distances a few times a day. Therefore, it may mean low mileage. Yet, it is for business purposes.

Loyalty Discount:

Some individuals give all their insurance needs to one company. It might be able to get them a cheaper business insurance rate.

Winter Tire Discount:

If the driver changes tires to winter tires for the winter season, there may be a winter tire discount for this.

The Type of vehicle:

Paying attention to the make and model of the vehicle may help. It may get a lower premium for the business use. If the family has two cars choose the one for business use that will be cheaper to insure. Plus, there are good deals that apply to commercial insurance.

It is important to be honest with the insurance company when it comes to the vehicle being used for business use.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.