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Working from home for the foreseeable future? It could impact your home insurance

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As many Canadians go back to working in offices, restaurants, stores and factory lines, others are learning from their employers they’ll be working from home for several more months — and possibly forever.

The Bank of Nova Scotia, for example, plans to keep most of its headquarter employees working remotely until 2021 as the novel coronavirus pandemic persists.

Ottawa-based Shopify has said most of its staff will be working from home on a permanent basis, while Facebook and other Silicon Valley giants have been toying with similar arrangements for at least part of their workforce.

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If you’re one of those people who’ll be toiling away from home for the foreseeable future, you should get in touch with your broker or home insurance provider, says Anne Marie Thomas of InsuranceHotline.com, which allows Canadians to compare insurance quotes online.

Unlike auto insurance, which is regulated provincially and offers pretty standard coverage, home insurance can vary considerably, Thomas says.

And working from home may give rise to liability that isn’t included or fully covered by a plain vanilla home insurance policy, she adds.

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If you’re a small business owner and have had to store inventory or use manufacturing equipment at home, you may need to purchase more coverage, whether that’s commercial insurance or additional endorsements, says Jessica Vomiero of LowestRates.ca, where users can compare mortgage, insurance, and credit card offers.

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You should also think about whether you need to adjust your home insurance if you’ve taken up a home-based side gig, Vomiero adds.

For example, if you’ve started a freelance baking business, you are now probably using your oven more often than usual, she says.

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If you end up having to file a claim and haven’t kept your home insurance provider up to date about your circumstances, the risk is having to pay out of pocket, Vomiero says.

If it turns out you’re not covered for that, well, you’re not covered for that,” Vomiero says.

Even meeting with clients at your home could raise issues insurance-wise, Thomas says.

You may think it doesn’t make a difference whether you’re having people over for a dinner party or a business meeting, but from an insurance perspective, it might, Thomas says.

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House parties are part of the regular liability exposure that insurance companies and their actuaries have taken into account when building your home insurance premium, she says. But client meetings may not be part of those calculations, she adds.
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“You can imagine, a client comes into your home and they trip over your dog,” Thomas says. “Now where does the liability fall? Is it your liability? Is it your company’s liability?” 

That’s why Thomas recommends keeping your home insurance company abreast of your working arrangements even if your job involves little more than typing at the computer and making phone calls.

“You’re probably OK. But it sure doesn’t hurt to have the conversation,” she says.

Home insurance policies typically have an exclusion stating that there is no business operating out of the home. And the definition of “business” could include working from home even as an employee, Thomas notes.

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Vomiero recommends being as specific as possible when describing your remote work circumstances.

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“Insurance is a very complicated and messy calculation,” she says. The more your insurance provider knows, the better they’ll be able to assess your coverage needs.

And don’t worry, she says — your premiums won’t go up just because you rang up your insurance company.

“You can call them to ask and inquire.”

You may find you need an endorsement for “incidental office use,” which might cost between $20 and $30 more per year, Thomas says.

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You should also understand whose coverage applies to any company equipment you’re using to do your job from home. Many people, for example, have been given allowances to purchase office gear such as a computer monitor or an additional keyboard to help them switch to working from home.

It’s a good idea to find out what, if any, company equipment is covered by your employer’s policy while you’re working remotely, Thomas says.

And keep in mind that home insurance policies normally cover up to $5,000 worth of business property, which may not be enough if you have, say, a particularly expensive laptop, Thomas warns.

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Still, the good news is your premium won’t go up simply because you’re spending more time at home.

Car insurance can get more expensive if you’re driving your vehicle to and from work. But home insurance doesn’t work that way, Thomas says.

While being at home all the time may increase the risk of domestic accidents, it also lowers the chance of break-ins or that you wouldn’t notice, say, water seeping into the basement, she notes.