Nowadays, many people use alternative or less traditional routes to make their income. This may include self-employed individuals and gig workers who support their livelihood through their own operations. If you’re an independent contractor and use your vehicle for work-related purposes, your personal auto insurance policy may not be sufficient.
Choosing commercial auto insurance may be essential for helping your business stay legally compliant or avoid financial losses. This guide will help walk you through what makes commercial auto insurance different, when it’s worth considering, and how Infinity Insurance Agency, Inc. (IIA) can help you find auto insurance for independent contractors that works for you.
Personal vs. commercial auto insurance
If you’re unfamiliar with these terms, we’ll break down the difference between personal and commercial auto insurance to help you understand their unique purposes:
Personal auto insurance
This type of coverage is common for drivers who use their vehicles for personal use. This may include daily commuting, personal errands, and road trips. Depending on your policy, this may cover damages to a third-party vehicle or injuries to someone else that you cause with your personal vehicle. Personal auto insurance typically does not cover accidents that happen to your vehicle or collisions that you cause if you’re using it for work-related purposes.
Commercial auto insurance
This type of auto insurance is designed for vehicles that are utilized for your business. Depending on your policy, commercial auto insurance may cover damages that your work vehicle causes to someone else’s property after an accident. It may also be recommended for you to choose higher liability limits than your state’s minimum mandated liability since operating business vehicles may be riskier.
Understanding how you use your vehicle for work
If you’re a self-employed driver, you may use your vehicle in a variety of ways. Why and how often you drive may have an impact on what kind of coverage you need.
Here are a few common scenarios for independent contractors and self-employed individuals who may need commercial auto insurance:
Delivery and rideshare drivers: If your income depends on transporting people or packages, your personal auto policy may not cover your vehicle while you’re on a job.
Independent contractors who travel from different job sites: If you’re work requires you to drive to and from various job sites, you may need commercial auto coverage.
Tradespeople and skilled workers: If you manage your own painting or construction business which requires you to drive to your clients’ homes, commercial auto insurance may help cover your vehicle.
The bottom line is, if your car is essential to earn your income, your personal auto policy may not be able to provide you with adequate coverage.
Evaluating insurance as a self-employed driver
So, how do you know what type of coverage to get for your business vehicle? If you’re shopping for auto insurance for self-employed drivers, you may want to ask yourself a few key questions:
How much liability coverage do I need in case of an accident?
How many miles do I drive for work each week?
Do I have employees who also drive my vehicle?
Am I transporting goods, materials, or passengers?
Your answers may help determine what kind of commercial auto coverage you may want and what limits you may need. Commercial auto policies may be more expensive than personal ones, but they also may offer you appropriate coverage for your business needs. If you’re trying to find commercial auto insurance that aligns with your budget, some carriers may offer flexible payment plans or discounts for having a good driving history or bundling multiple vehicles.
Why independent contractors choose IIA
IIA is a trusted agency that specializes in helping independent contractors find insurance solutions that fit their needs. Our team can help you compare rates from 20+ carriers as well as guide you through your insurance questions. By working with IIA, you can talk to experienced, Spanish-bilingual agents who understand the difficulties of finding insurance for self-employed individuals. Our agents are here to help you customize a policy that fits your requirements and budget.
So, if you’re operating your car for work-related purposes, it may be worth assessing if you’ve got the right coverage for your needs. Call IIA today at 1-855-478-3705 or head to our website to get a free personalized quote!