What types of insurance do gig workers need?

As a gig worker, your insurance needs will differ depending on the type of gig you work, such as driving for a rideshare service, making deliveries, or freelancing as a writer, photographer or content creator. You may need specialized coverage, such as auto or property insurance, health insurance, life insurance or disability coverage, tailored to your specific work activities. 

For example, if your work involves driving, you need the correct type of auto coverage since personal car insurance doesn’t cover business use of your car. Or, if you work from home as a freelancer or contractor, you may need business property insurance.

Gig workers also typically need to have their own health, life, accidental death and dismemberment (AD&D) and disability coverage, none of which is generally available to non-employees.

“Many gig workers assume they're covered because the platform says they are. But the truth is, they're usually only covered for what they're doing in that specific moment. And what they're doing in that specific moment may not be the same from time to time,” said Adam Dayan, founding partner and president of the Consumer Law Group, LLC. 

“For instance, they may be covered when they're on the job, but they're not covered when they're waiting for the job or driving from one job to the next.”

It’s important to note that not telling your insurance company that you’re working using your car or out of your home can lead to denied claims, higher premiums or having coverage dropped altogether. Always review your policy and consult with your insurer to ensure your gig activities are properly covered.

“I think the simplest way to understand this is to think about the gaps in terms of where the coverage starts and stops, and then decide if you need to level up or if you are willing to take a risk,” Dayan said.

Auto insurance for rideshare and delivery drivers

Personal auto insurance doesn’t cover any business use, and the coverage offered by some platforms leaves gaps that can be costly. Gig workers need to add either a business-use rider or commercial insurance. These auto insurance options cover you while working your gig, but they are more expensive than personal car insurance.

“Auto insurance is one big one because your personal auto insurance does not cover you if you're using your car for work. The coverage provided by the platform may be relatively meager. The same basic situation exists with liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people. and health insurance. The coverage sounds good, but it doesn't cover every possible situation,” Dayan said.

Platforms such as Uber, Lyft, or DoorDash may offer limited liability coverage that kicks in while you’re on a ride or during a delivery. However, when you’re logged in and waiting, platform insurance typically doesn’t offer any coverage.

To be fully covered when driving for work:

  • Ensure that your personal auto insurance carrier knows you use your car for gig work; the representative can provide guidance for the correct coverage.
  • Add a business use endorsement, if available. Many carriers now offer rideshare endorsements that protect you when carrying passengers for pay.
  • Consider commercial auto insurance, especially if driving is your main source of income and not a side hustle.

Business property insurance for freelancers and independent contractors

As with personal auto insurance, home insurance doesn’t cover all business use or property. Property you may use for your gig work, such as a laptop or camera, isn’t covered under your home insurance policy, or may be covered on a limited basis.

Adding business property insurance protects your tools and equipment from theft, vandalism, or other accidents. For example, if your camera bag gets stolen at an event you’re working, business property insurance covers a replacement.

To ensure your business property is fully covered:

  • Calculate the value of business property and carefully read your home insurance policy for coverage and limits on business property.
  • Add a business property endorsement if your current coverage isn’t adequate.

Note: Car insurance doesn’t cover personal or business property, but your home insurance will extend to cover items in your car, including business property, if that coverage is part of your policy.

Health insurance for gig workers and freelancers

Employers don’t generally offer health insurance to contracted workers, leaving a large portion of the workforce without coverage. However, gig workers do have options for coverage on the open market or through the Affordable Care Act (ACA).

Many companies offer individual healthcare coverage. Although costs may be higher, customers have many coverage options tailored to their needs.

Under the ACA, workers buy health coverage but may be eligible for income-based subsidies to cover the costs. There are multiple plans to choose from, but you can typically sign up for coverage only during specific enrollment periods.

Organizations like Freelancer’s Union or Opolis also help freelancers find affordable coverage by offering group rates. These rates may be lower than on the private market because risk is spread across a group of people, as in employer-sponsored coverage, which helps reduce rates.

Gig workers and freelancers may also need to add vision and dental coverage. These coverages are typically add-ons with additional costs.

Life, accidental death & dismemberment and disability insurance for gig workers

Many companies offer benefits, such as life and accidental death and dismemberment (AD&D) insurance, to help their employees plan financially for catastrophes. However, gig workers don’t get those same benefits, making financial planning more difficult, so they should consider buying coverage themselves.

These policies are available nationwide from insurance companies at varying costs:

  • A 20-year term life insurance policy with a death benefit of $250,000 costs an average of $28.50 a month at 30 years old.
  • AD&D costs as little as $60 a year, but averages $7 to $10 a month for $100,000 in coverage.
  • Long-term disability insurance costs an average of 1% to 3% of your annual income.

Life insurance helps pay for financial obligations if you should die of almost any cause, while AD&D insurance covers death or serious injuries that can occur during a gig, such as being severely injured in a car accident while waiting for work. Similarly, disability insurance replaces a portion of your income after an injury.

AD&D and disability insurance are especially important for gig workers who don’t get PTO. If you are uninsured and injured as a gig worker, there is no insurance to fall back on unless you buy it yourself.

What other insurance should gig workers and freelancers consider?

To be more fully protected, gig workers should consider additional insurance, including liability, equipment protection and accident coverage. Adding coverage can help you avoid costly out-of-pocket expenses and keep you earning.

Gig workers and freelancers should consider adding coverage such as:

  • General/business liability: Covers injuries to others, property damage and advertising injuries, such as libel or copyright infringement 
  • Professional liability: Covers claims of negligence or errors and pays legal fees and settlements
  • Equipment protection: Covers equipment used for work, such as laptops, tools and cameras
  • Occupational accident/disability: Helps pay for medical expenses and lost wages after an accident

Where can independent workers get insurance?

In addition to getting insurance through the ACA, gig workers can find insurance through private companies or add coverage through their current insurers.

Depending on the coverage you need, your options include:

  • Your current auto or home insurer. Your insurer may allow you to add coverage to your existing policy, such as a business-use rider to your auto insurance.
  • The ACA health insurance marketplace. You can get healthcare insurance through Healthcare.gov during open enrollment.
  • Private insurance groups. Groups such as Freelancer’s Union, Opolis, and Lettuce.co offer group insurance that independent workers can join for better rates and broader coverage.
  • Specialized insurers. Some insurers specialize in insurance for independent workers, such as Ergo Next, Zurich, and Axis.

How much is insurance for gig workers?

While premiums vary significantly by worker and coverage options, average annual insurance rates for independent workers are:

These rates will vary depending on the amount of coverage you need and the industry in which you work.

FAQ: Insurance for gig workers

Can gig workers get group health insurance rates?

Yes, some private insurers and groups like Opolis offer group health insurance that keeps rates affordable for gig workers. Group health insurance plans offer more coverage options with lower rates than individual private policies.

Are rideshare drivers considered self-employed?

Yes, rideshare drivers are self-employed and must provide their own insurance, including auto, life and liability coverage.

Is insurance tax-deductible for self-employed people?

Yes, self-employed people can deduct insurance premiums, including health, auto, and liability coverage, on their taxes. Review the IRS rules for deducting each item in your specific circumstances.

Who is considered a gig worker?

A gig worker is someone who doesn’t work for a company but rather works for themselves. While they may perform certain tasks for a company, they are not considered employees and do not receive benefits. They are also responsible for their own insurance needs.

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