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Working from home used to be something that was reserved for moms on maternity leave or artists who were starving for their big break. Having a remote career was seen as an odd alternative to the fulfilling work done at the office.
Then the COVID-19 pandemic hit. The world flipped upside down. People were forced to stay at home during government-mandated shutdowns. Industries that never thought they could produce quality work remotely were now forced to allow their workers to alter the location of their services.
But what does all of this mean for the lives of those who were used to driving to their job? There is obviously the benefit of not having to dress up and smell nice when you get up to go to your Zoom meeting, but there are financial benefits to remote work, too.
Auto insurance is one of the best ways to save money. An insurance work-from-home policy is going to be a lot cheaper than insurance when driving to a location to work. When you don’t drive often, you are much less of a risk to the insurance company. You are on the road less, and there are fewer chances for car accidents to occur.
Another benefit to working from home is that you can apply for tax breaks on rooms you use for work. Do you need to work freelance to get these discounts? We’ll talk about these things and try to help you understand whether your remote work will help you get any of these benefits.
Why does working from home help my insurance rates?
Insurance is all about the risk to the company you are going through. Even the best drivers are going to get more expensive rates if they are driving thousands of miles per year than other people. State Farm has an increase of over 5% per year for drivers with long commutes to work. But not every commute is the same. What defines a long commute?
This is where low mileage discounts come in. Someone who drives to work could receive a discount over another policyholder who also commutes if the total mileage of the trip each day is much lower. A remote worker could receive even more discounted coverage.
Not every company engages in these benefits, though. Progressive has less than a 1% discount per year for low-mileage drivers.
Talk to your employer about working remotely for one or two days a week. This decrease in commuting, even if it seems small, could present opportunities for discounts if you are with the right insurance company.
If you live close to your job, think about taking public transit or carpooling to work. Bicycling is another option. There are a lot of creative ways to get cheaper insurance depending on your job’s location. You just need to think outside the box and talk with your agent and your boss about remote work versus in-person work.
The bottom line is that you are trying to eliminate the risk of filing a claim with your insurance company. When you work from home, even for one day a week, you cut down on the chance of getting into a wreck on the road. Many insurance companies will reward this behavior with cheaper rates.
But what are some other financial benefits of working from home? How do they relate to insurance policies?
Building a home office
Exercising at home has required many people to build home gyms, and working from home requires the same train of thought. You probably will have to carve out some space in the house specifically for your job.
Some people may have managed to focus in the living room despite the loud distractions from pets and children, but it’s not a viable long-term solution. This is when building a home office comes into the picture as a home improvement resolution.
You may be wondering whether you can get better rates on your homeowners’ insurance for working from home, much in the same manner that we talked about with auto rates. The answer is not very clear. Homeowner’s insurance is typically only discounted if you improve the safety of your home in some way.
If creating an office space for remote work includes installing extra safety devices, you may have a chance at discounts. It’s hard to imagine, though, why working from home would make you do this. Most security systems are designed to give peace of mind when you are away. Being home would probably require fewer precautions.
If you decide your current home is not a reasonable place to work, you may decide to move into a place more suited for you. There’s a lot to consider when you start working remotely. If you move into a safer city, say the suburbs instead of downtown, you may get a cheaper insurance rate on your house.
Non-insurance discounts for working at home
Working from home can present some financial benefits that don’t have to do with insurance, too. Driving less will save you money on gas. It will help you keep the wear and tear on your car to a minimum, so there are fewer trips to the car shop.
Home offices can also be used as a tax write-off if you are a freelance contractor. Because you are not being provided space to work and have to create your own, the government will give you a tax break for the money you put in specifically for your job.
If you just use your kitchen or your bedroom, you will not have this opportunity. The room has to be exclusively for your contractor position.
Between all the discounts, both insurance and non-insurance related, it has become quite a boon to working remotely during the last couple of years. It seems to be the future of the modern workplace environment.
Make sure you talk to your insurance agent about how working from home can affect your life, both for auto and home packages. They may even be able to give you tips on healthy financial living outside of insurance.