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5 tips for buying car insurance for the self-employed

Along with the many other steps to take when starting a business, here's one that many self-employed folks neglect: checking to make sure they have the right car insurance coverage.

Just because your business is part-time or operated out of a home office on a shoestring budget doesn't mean a personal auto insurance policy is enough. There are different types of car insurance that you should know about to be sure you have sufficient coverage.

Here are five coverage tips to make sure you have the protection you need:

1. Don't lie to the car insurance company.

A personal car insurance policy typically excludes coverage for some types of business use, other than commuting to an office, so you need to check the policy and let your insurer know how you're using the vehicle.

"Otherwise the insurance company could deny a claim and then cancel your policy if you rely strictly on a personal auto insurance policy and use your vehicle for business purposes," says consumer analyst Penny Gusner.

That goes for part-time businesses, too, says James Kuryak, principal of Niagara National Insurance in Buffalo, N.Y.

In his region, for instance, a lot of folks make extra money in the winter by attaching plows to their pickups to clear private roads. Generally vehicles with equipment attached to them require commercial insurance.

2. Determine whether a business-use endorsement on your personal policy is necessary and would provide enough coverage.

A business-use endorsement is an addition to a personal car insurance policy. It's geared toward professionals such as real estate agents, lawyers or consultants who drive frequently for business, but aren't using a car in ways that a personal policy would exclude. Adding the endorsement boosts the premium, but a personal policy with a business use endorsement is still usually less expensive than a commercial car insurance policy.

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