If you’re a freelancer, there’s a good chance that your home office is actually just your office. There’s a huge benefit to this: not only do you get to choose your own hours, but you can work from the comfort of an office that you create. No more cubicles!
But there is one thing that you have to worry about now: how do you protect your business in the case that your rental property goes up in flames? Luckily, there’s a pretty simple (and cheap) solution: renter’s insurance.
What, exactly, does renters insurance do?
Renters insurance covers the cost of replacing personal property and liability for injuries sustained in your rental property.
Why would I want to buy it?
Let’s say your apartment burns down, or even explodes because of your city’s complete and utter failure to replace aging gas lines. Maybe your upstairs neighbor flushes their toilet the wrong way and water starts leaking into your apartment. Or your roommate leaves the window by the fire escape open during the day and someone pops into to steal your TV.
Renters insurance covers all of these scenarios.
Even if you guessed that using the name and logical deductions, you probably didn’t guess that renters insurance would also provide liability coverage, both for other humans and other property.
For example, your brother-in-law comes over to your apartment and slips on some guacamole that you dropped on the floor (in this scenario, you love guacamole, but not enough to be careful with it). Since you’re at fault, your renters insurance company will cover your brother-in-law’s medical bills. No need to reallocate your chips & dips budget!
As another example, let’s say you like to cook. You’re at your natural gas stove, boiling some water for your latest creation (threaded spaghetti hot dog bites?), when you turn your head away for a second to answer a text message. You turn your head back and all of a sudden your entire stove is up in flames, and the fire has quickly spread through the wall and into your neighbor’s apartment! You repeat This is very bad, but at least my renters insurance policy covers damage to neighboring apartments if I am fault under your breath over and over again until the fire department shows up.
That’s all pretty neat, right? But did you know that renters insurance also provides limited coverage of your belongings outside the house?
That’s right, renters insurance will cover the cost of belongings stolen while you’re out of the house, like if your phone is stolen from your car or if all of your clothes are stolen from a hotel room.
Plus, renters insurance will also cover you if your dog bites someone, even if it happens out on the sidewalk.
Disclaimer: Not every renters insurance policy covers everything that renters insurance can possibly cover. Check your policy’s full list of perils and exclusions (and ask to see the list before you buy a policy) to see what’s covered.
Wow. Is there anything renters insurance doesn’t cover?
Yep. Most importantly for you: renters insurance does not automatically cover business property, or any personal belongings that are also used for business purposes.
The good news: you can get what’s called a "rider" or "endorsement" to expand your renters insurance coverage to include both business property and business liability. This option is great for freelancers who work from home and don’t have a lot of expensive equipment. A business liability rider will also protect you if you have clients who come to your home.
Renters insurance also doesn’t cover very, very expensive items, like jewels or artwork. You’ll need separate coverage or a special endorsement on your policy in order to cover those.
How do I figure out how much coverage to buy?
Make an inventory of everything you own and add up the value!
Do I seriously have to make an inventory of everything I own?
Building an inventory not only helps you realize the full value of all of your belongings, it helps you make claims if any disasters happen.
Plus, building an inventory isn’t that hard. There are bunch of websites and apps that can help you build an inventory (your renters insurance company may even have their own tool). After you make it once, you really only have to update it every six months or so.
Here are a few tools that can help you build your inventory:
Sortly (iOS app)
Encircle (website and app)