Working from home and home insurance

Our guest post today covers the basics of making sure your insurance policy is still valid if you work from home:

In the current economic climate, many people have been made redundant and have found themselves unable to get a new job in the same line of work.

Whilst that might be expected over a short period of time, when that time starts to turn from weeks into months people tend to get a bit more creative in terms of what they’d be prepared to do for work.

Many people lower their income expectations or widen the geographical area in which they search for their jobs. Others decide to find work that they can do from their own home, making money and balancing their work and family commitments.

Depending on the nature of the work undertaken from home, a homeworker will have different equipment that they use for that work. If they run an ironing and laundry service, for example, they may have industrial-sized washers, dryers and irons. If they’re doing office-type work they will have a computer and printer.

All of these things are essential to their everyday running of their business and usually represent quite an expensive investment in their chosen line of work.

So what happens if something happens to that equipment? What if it gets stolen, or damaged by fire? Standard house insurance won’t normally cover home office or homeworking equipment and if you’re using your home or any part of it for employment purposes your home insurance might be invalid altogether.

That’s because when an insurer is working out your premium for the year, they work out the likelihood of something bad happening. They use information like your history of claims, the security on your home, whether you’re a smoker and things like that to see how much risk there is of your house being burgled or otherwise damaged. If they don’t know that you work from home and have equipment associated with that work then they won’t have factored that into your quote.

Having office or other equipment in your home for work could make your house more at risk from theft or fire – and your insurers might say that if they’d known about it they would have given you a higher quote.

So if you’re working from home you must inform your home insurance providers so that, if necessary, they can adjust your premium. At least that way your equipment will be covered and so will the rest of your home in the event of fire or other loss.