Car insurance for the self-employed


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Frequently asked questions

  • What type of car insurance do I need if I’m self-employed?
  • Is car insurance for the self-employed more expensive than standard car insurance?
  • Do I need to tell my insurance provider I’m self-employed?
  • Is car insurance tax-deductible for self-employed people?
  • Can I cut the cost of my car insurance if I’m self-employed?

What type of car insurance do I need if I’m self-employed?

If you’re self-employed and your car is just for personal use – like visiting friends or going to the shops – regular car insurance will cover you. If you use your car to commute to work, you may need to add cover for commuting.

But if you use your car for work purposes, perhaps you’re a care worker who drives to visit patients, you’ll need to have business car insurance. You’ll also need to make sure any employees driving their own vehicles for work are covered for business use.

There are three classes of business car insurance:

  • Class 1 can cover you if you drive between different places of work or occasionally drive to meetings
  • Class 2 can include a named driver – usually, this has to be someone you employ
  • Class 3 is for people who travel a lot for work.

If you’re delivering commercial merchandise or driving a private taxi, you’ll need a different kind of insurance.

Is car insurance for the self-employed more expensive than standard car insurance?

It can be. Business car insurance is often more expensive, because insurance providers consider business drivers to be at greater risk of having accidents – and making claims.

The price of your insurance also depends on what you do for a living.

Do I need to tell my insurance provider I’m self-employed?

You’ll need to tell you insurance provider you’re self-employed to make sure you get the right cover for your needs.  

Is car insurance tax-deductible for self-employed people?

Yes, if you use your car for work. Car insurance is counted as a ‘running cost’ of your vehicle, along with petrol, parking fees, servicing and repair costs, so you can claim it as an allowable business expense. You can’t, however, claim the cost of buying a vehicle.

Can I cut the cost of my car insurance if I’m self-employed?

Whether you’re self-employed or not, there are a few tips for getting cheaper car insurance.

  • Consider increasing your voluntary excess. While this can help cut the cost of your premium, make sure you can afford to pay both the voluntary excess and compulsory excess if you want to make a claim
  • Reduce your annual mileage – if you can cut down on the amount of driving you do, you could reduce the cost of your car insurance
  • Consider a telematics policy and you could be rewarded with lower premiums for driving safely.

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