Renters insurance for freelancers

Losing certain items, like a laptop or cell phone, might be devastating for a freelancer’s ability to earn an income, but renters insurance can help you replace them.

If you work freelance, you know you already have enough to worry about. Freelancers love the flexibility of being their own boss, but it can be exhausting to acquire and maintain new clients or produce enough work to earn a steady, livable income.

One way to ease some of that stress is to purchase a renters insurance policy. If you rent your home, renters insurance protects your personal property by reimbursing you the cost of the item if it gets stolen or destroyed. Renters insurance also protects you from liability if somebody is injured in your home and could even provide payment to help you find alternative accommodations if your home becomes unlivable.

Losing certain items, like a laptop or cell phone, might be devastating for a freelancer’s ability to earn an income, a financial burden which is compounded by the period of lost business while you replace these items. Renters insurance can cover the cost so it doesn’t come out of your wages. Because renters insurance is so inexpensive – often no more than $20 to $25 per month – it may be an essential part of any freelancer’s financial plan.

Read on to learn more about:

Why freelancers need renters insurance

If you’re a freelancer, and you work from home, your home is also your home office. In that sense, renters insurance is kind of like home office insurance.

Freelancers rely on their personal property to do their job, whether they’re a bike messenger, a reporter, a graphic designer, or an insurance agent and losing the tools that make those jobs doable could mean having to pay out of pocket to replace them. Renters insurance has provisions that cover all these occupations.

Freelancing can be rewarding, but not always financially, with many freelancers earning below minimum wage on a per-hour basis. Earning a modest income may make it financially difficult to replace something as expensive as a laptop, so renters insurance offers something of a compromise: pay your premiums, and in return the renters insurance company will reimburse you the full cost of your equipment if it’s lost.

A renters insurance payout may also arrive more quickly than the time it’d take to save up to replace the lost item. You won’t have to worry about frustrated clients waiting on a deliverable or downtime in your ability to work.

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In some cases, the renters insurance premiums may even be written off as a business expense on your taxes. We explain how to do that here.

What renters insurance covers

Renters insurance comes with several provisions that help renters avoid financial risk. Virtually every policy comes with the following types of coverage.

Personal property coverage

This is the coverage that protects your stuff when from theft, vandalism, and certain kinds of weather hazards. It doesn’t cover damage to the building structure, since the building is owned by the landlord you rent from. Personal property coverage may extend to items you leave outside your home, such as your bike, or even to items you use when you stay somewhere away from home.

Personal property is only covered up to a limit, which depends on the type of property. These amounts are called the limits of liability, and highly valuable items, such as your laptop or expensive camera equipment, may require you to purchase additional coverage.

However, if the item is used exclusively for business, you may need to purchase additional coverage. Some renters insurance policies do cover goods for sale that you store in your home, but often with a low limit of liability. That means if you make a living selling items online from your home, you’ll need to purchase more coverage than someone who only needs to insure his or her computer and peripherals. For that kind of extended coverage, you’ll need to add a business property rider to your renters insurance policy.

Liability and medical expenses coverage

If someone gets hurt in your home, including a client coming by for a consultation or to receive a deliverable, they may sue you for damages or request that you pay for their medical care. Most renters insurance policies cover liability expenses as well as medical payments to others. Limits of liability also apply, so be sure to purchase enough coverage.

Your renters insurance policy defines what types of expenses it will cover. This usually means “reasonable” or “necessary” expenses, such as surgery or an X-ray. Some renters insurance policies even cover injuries such as dog bites.

Liability coverage also extends to bodily injury or property damage you or someone covered by your policy inflicts on someone else. But many freelancers purchase a product separate from renters insurance called liability insurance, which is more tailored to someone who interacts with a lot of different people – clients, vendors, and so on – throughout the workday.

Loss-of-use coverage

If you’re a freelancer, and your rental home or apartment gets so badly damaged that you can’t live in it, that may mean the loss of your home office, too. Your renters insurance policy probably won’t cover a temporary move to your local coworking space, but it may pay out if you need to stay a short time at a hotel or another alternative accommodation.

Making an inventory for coverage

In order to get renters insurance coverage, the carrier may request that you create an inventory of items in your home. That will not only give you an idea of how much coverage you need but also help the carrier make sure you’re getting the right amount and thus assess you the correct premium rate.

On the inventory, you should include property that has nothing to do with your business, such as your TV or expensive kitchen appliances (and especially if you’re a TV critic or make homemade edible goods). Business property, of which more expensive items are covered on the special rider, may need be indicated as such.

Certain high-value items, like furs or jewelry, may not be covered by the renters insurance policy unless you purchase additional coverage. An inventory can let the renters insurance company help you figure out what’s covered and what’s not.

Disclaimer: Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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