How to choose insurance for freelancers


When first starting out, a freelancer should have 3-6 months of savings to live and work worry-free. But, to continue on your entrepreneurial journey, maintain focus, and not worry about money, don’t forget to include insurance in your plans.

Insurance may be something we pay for and ignore (with the hopes of never using it), but without it, you could end up giving up more than a few months of cash flow. 

Depending on the type of business you run, you’ll need to evaluate different types of insurance and update your coverage accordingly. For example, an Uber driver may be paying for car insurance, but unless they’re with an insurance provider who offers coverage for ride-sharing, they wouldn’t be covered.

If you’re an Uber driver you’ll want to get some car insurance quotes from either Intact or Aviva. They’re the only two insurers that offer car insurance specifically designed for ride-sharing drivers. 

If you work from home, it’s a good idea to update your home insurance policy. You should take this opportunity to insure you have the proper coverage for the contents that are essential to your work, as well as a copy of the receipts and documentation to back up any claims. Finally, if you have any dependents who rely on a consistent revenue stream, maybe it’s time to consider life insurance. Here’s why.  

Car insurance

But even if you only drive to meet potential clients or conduct meetings with current ones, you should still speak with your current car insurance provider. Honesty is the best policy, even if it costs you a few more dollars now. Informing your insurer of any changes helps them determine if they need to adjust your policy pricing to accommodate for any new risks, which in the end ensures you’re adequately covered.

If something does happen, and they’re not aware you’ve added another 20,000 km’s to your annual driving, it’s possible they could deny your claims, or even worse, your coverage. In the end, it’s better to pay for the more robust insurance policy. If you’re in an accident, you may be faced with a significant repair bill—car insurance will be far less expensive than paying out-of-pocket. 

As a freelancer, every dollar is precious. If you’re already talking to your insurance provider, take the time to inquire about any potential discounts, too. Make sure to maximize all potential savings by bundling your car insurance together with your home insurance, asking about additional discounts like paying annually instead of monthly, or taking advantage of any applicable union/group benefits like being a part of Unifor, the Canadian Freelancers Union, could actually help you get a better rate. 

It’s important to take the time to compare car insurance not only to ensure you’re getting the best rate, but to also compare different perks and benefits. For instance, some insurance policies can get you access to roadside assistance, at no additional cost to you. It’s also worth noting that some of the best credit cards in Canada have this added perk too. There’s no sense in paying extra for coverage you already have or being over-insured, so make sure that you’re reviewing your policy details, and checking what you already have access to. 

Home insurance

If you’re running a daycare out of your home, you should absolutely have a comprehensive home insurance plan. If someone slips and falls, your roof caves in, or whatever the case, you’ll want to be protected from your business collapsing from the financial pressure. 

If you’re a freelance journalist, music composer, or filmmaker, you may not be worried so much about someone suing you from an accident at your house. However, if your prized violin or latest gadget goes missing, you’ll need a quick replacement to get back to earning money. 

Home insurance is important whether you own or rent, or whether you live in a house or a condo. In a condo that has 24-hour security and front desk concierge it’s easy to be lured into believing you’re safe, but home insurance extends beyond your building. If your laptop is stolen from your car, you’ll turn to home insurance which covers your named belongings. It’s vital that you do a content audit of your valuables with pictures and receipts to submit to your insurance provider. 

The building itself has insurance for shared elements like stairs, elevators, and the front lobby, but you’ll need your own condo insurance to protect you if someone injures themselves in your unit or in rare cases that your building’s own insurance doesn’t have sufficient coverage to handle the unforeseen cost of a major repair. 

Life insurance

If you’ve left the corporate life to go freelance, you probably already have your health benefits—everything from dental and prescription drugs sorted. If not, a quick Google search for health benefits for the self-employed and you can buy into a plan to provide you coverage. 

But, what about life insurance? If you’re single and pass away, life insurance can help cover the funeral expenses so your family isn’t burdened with the costs. If you have dependents like a significant other, or children, then it’s time to shop around for life insurance quotes

When shopping, here are a few quick rules to help save you some money. A term life insurance policy is far less expensive than a whole or universal life policy. The big difference is a term policy is for a specific period of time (5, 10, 20 years) and costs less as a result. A whole life policy covers you for life with a guaranteed payout upon your death so long as you keep making the payments. 

You’ll need to know a few things first. If you have a family, how much money would they need to cover mortgage payments, education, and other monthly expenses? Add it all up. Next, when do you feel your children will be adults or your significant other will be able to move on? 

Have you made a plan that you’ll try freelancing for 5 years, and if it’s not working out, go back to work? If so, get a 5-year term life insurance policy. If you’re in it for the long haul, get a longer-term policy that protects your family from any financial burdens. Remember, they’re on this journey with you. 

The bottom line on insurance for freelancers

Being out on your own is tough, and with proper planning, it can make life less stressful. You gave up office life and gained the freedom to work from anywhere, congratulations, keep going! Remind yourself what you have and don’t forfeit the safety net the right insurance coverage can bring you.

Ratehub is a website that compares mortgage rates, credit cards, high-interest savings accounts, chequing accounts and insurance with the goal to empower Canadians to search smarter and save money.

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