COVID-19 caused many businesses to transition their workers to work from home. Many workers who were in hard-hit industries launched their own ways to generate income from their homes. In the whirlwind of dealing with a global pandemic and adjusting to remote work, you may not have thought to update your car and home insurance.
Working remotely can save you money on your car insurance. When it comes to understanding car insurance for working from home, you may be able to get low-mileage car insurance, which could lead to a discount of up to 30%. Make sure to tell your insurance company if you work from home to see if you qualify.
We’ll detail the benefits and downsides of working from home. We’ll also discuss how remote work can affect your insurance rates.
Benefits of Working from Home
There are many benefits of working from home, and the main benefit is saving money. Outside of the financial benefits of working from home, there are other benefits as well.
Without a daily commute, you’ll have numerous savings on car costs. You’ll have less wear and tear on your vehicle. Other savings include less money spent on regular maintenance and fuel costs.
Some companies require business or business casual attire, which costs more money to update your wardrobe. If you’re working remotely, you can wear the clothes you already have in your closet. You can even wear your pajamas if you want to.
When working in an office, you may want to eat out for lunch, which leads to increased costs for food. If you’re working from home, you can easily prepare meals at home from what you have available in your kitchen. However, you’ll only save money if you’re eating at home, not if you are ordering takeout or food delivery to eat at home.
You may also be eligible for home office tax deductions if you itemize deductions. You may partially deduct office supplies, computer supplies, internet costs, or other costs you might accumulate from working remotely. You should work with an accountant to see what expenses you are eligible to deduct.
Another benefit is increased productivity or time. You are saving time by not having a daily commute or wasting time sitting in traffic. This time could be put back into your professional or personal life.
If you work from home on a full-time basis, you can move to a preferred location. This is great if you’d like to move closer to family or if your partner is relocated for their job. If you live in a city with a high cost of living, you could move to another location with a lower cost of living.
Many people love the flexibility of remote work. If you aren’t a morning person, you could start your work responsibilities later than if you had to be in the office by 8 am. Working from home also allows you to be more available to pick up children or do household chores when you take a break.
Some remote workers may also find it easier to keep up with their exercise routine. They may exercise at home with fitness equipment, use a fitness streaming app, go for a walk in the middle of the day, or go to the gym during a less busy time in the morning or afternoon.
While recent estimates suggest that employees can save up to $6,000 a year by working remotely, there are also some downsides to working remotely.
Downsides of Working from Home
First and foremost, those who are working remotely may miss the social engagement that occurs while working in an office. It may be lonely when you don’t have daily interaction with others. If you have virtual meetings, this may help you feel more connected to others.
Some may find it more difficult to stay motivated to keep up with work duties while at home. You may be more distracted by personal responsibilities like cleaning, laundry, or child care. It might be tough to turn off the TV and get to work.
Another downside is that you may find it more difficult to disconnect from work responsibilities. It’s easier to leave work at the office, but more challenging to do so when you’re working from home. It can be tough to separate professional and personal responsibilities.
Depending on your career, there may also be IT security concerns when working remotely. However, there are things that employees can do to improve their security to prevent data or account information from being compromised.
If you are an independent contractor for a company while working remotely, make sure to put aside money for taxes. Your employer may not take out taxes, and you are responsible for paying your yearly income tax. Those that receive a 1099 form should set aside at least 25% to 30% of their income to pay their taxes.
How Companies Benefit From Employees Working Remotely
When employees work remotely, companies can also reap the benefits. They don’t have to provide office space, and the cost of utilities is much less without employees in the office.
Sometimes employers pass these benefits to employees by offering incentives, enhanced benefits, or higher pay. Some companies may offer opportunities for employees to engage with others with messaging applications or virtual meetings.
Companies that offer remote work also benefit from increased productivity and decreased absenteeism from work. There’s nothing wrong with taking a sick day when you need it, but some employees may work if they feel up to it.
How does working from home affect your insurance rates?
If you’re working remotely, you will want to update your car and home insurance policies. While working remotely won’t save you money on your homeowners insurance, it’s good to update your policy to make sure you have adequate coverage for a home-based business or remote work.
Working remotely can save you money on your car insurance. If you work remotely, even just occasionally, you may qualify for a low-mileage commute discount on car insurance. The reason for this is that if you drive less, you are at lower risk, which lowers your car insurance rates.
The average savings discount from a low-mileage commute is 18%, but it can be up to 30%. Let your car insurance company know if you commute less than 20 miles each way or less than 7,000 miles annually. The best low-mileage auto insurance companies are Geico, Metromile, and USAA.
There are different ways to work from home, like starting your own business or working for your current employer. If you aren’t able to work from home 100% of the time, you may talk to your supervisor about the flexibility of working from home. Maybe you could work remotely a few days a week and be in the office a few days a week to give you the benefits of both options.
Melissa Morris writes and researches for the auto insurance comparison site, AutoInsurance.org. She is a university professor of health sciences and human performance and works remotely part-time.
Interesting Related Article: “Want To Start Working From Home? Here are the 7 Best Work From Home Jobs For You“