Continue

Being your own boss is exciting, but it comes with added responsibilities—like securing your own insurance. Unlike traditional employees who may get coverage through an employer, freelancers and self-employed individuals have to navigate the complex world of insurance on their own. Fortunately, there are smart ways to save money while still getting the coverage you need.

From health insurance to liability protection, let’s explore top insurance-saving strategies tailored specifically for freelancers and self-employed professionals.

1. Choose a High-Deductible Health Plan (HDHP)

Health insurance can be one of the biggest expenses for freelancers, but a high-deductible health plan (HDHP) can offer significant savings.

• Lower Premiums: HDHPs typically have lower monthly premiums compared to traditional plans. You’ll pay more out-of-pocket for doctor visits, but if you don’t need frequent care, this is a great way to save.
• Pair It with a Health Savings Account (HSA): An HSA lets you set aside pre-tax dollars to cover medical expenses, effectively reducing your taxable income. Plus, the money rolls over each year, and you can even invest it for tax-free growth.

Quick Tip: Shop around using online marketplaces like Healthcare.gov or comparison sites like eHealth Insurance to find the best deals.

2. Consider Group Health Insurance Options

As a freelancer, you might assume that group health insurance isn’t an option—but think again! There are several ways to get group rates, which are often more affordable:

• Professional Associations: Many industry-specific associations offer group health insurance for members. For example, the Freelancers Union provides access to group health plans.
• Local Chambers of Commerce: Your local chamber might have partnerships that provide access to group health plans.
• Co-Ops and Unions: Look for cooperatives or unions in your field that provide discounted insurance options for independent workers.

Insider Tip: Membership fees for these associations can be tax-deductible, adding another layer of savings.

3. Bundle Your Insurance Policies

Bundling multiple insurance policies with the same provider is a smart way to save. Here’s what you can consider bundling:

• Auto and Home/Renters Insurance: Many insurance companies offer discounts if you combine your auto insurance with home or renters insurance.
• Business Insurance Packages: If you need general liability, professional liability, or business property insurance, look for a Business Owner’s Policy (BOP). This bundle often costs less than purchasing each policy separately.
• Health and Life Insurance: Some insurers provide a small discount for purchasing both health and life insurance from the same provider.

Pro Tip: Always compare the cost of bundled packages with standalone policies to make sure you’re getting the best deal.

4. Shop Around and Compare Rates Annually

Rates for insurance policies can fluctuate, so it’s crucial to shop around and compare quotes regularly—especially if your circumstances change.

• Use Online Tools: Websites like Policygenius and The Zebra allow you to compare rates for various types of insurance easily.
• Contact Independent Agents: Independent insurance agents work with multiple carriers and can help you find the best deal tailored to your needs.
• Review Policies Annually: Make it a habit to review your insurance needs every year. As your business grows or shifts, your coverage should adapt too.

Takeaway: Don’t be afraid to switch insurers if you find a better rate—loyalty doesn’t always pay in the insurance world.

5. Look for Business-Specific Discounts

Many insurance companies offer discounts specifically designed for freelancers and small business owners. Here’s what to look for:

• Home Office Discounts: If you work from home, some insurers offer discounts on business property insurance if you have a designated home office.
• Professional Certifications: If you hold professional certifications or licenses, some insurers offer discounts for recognized qualifications.
• Industry Associations: Being part of professional organizations can sometimes trigger discounts or give you access to exclusive rates.

Insider Tip: Document any home office safety upgrades, like installing a smoke detector or alarm system, to qualify for additional savings.

6. Increase Your Deductible to Lower Premiums

If you’re confident that you won’t need to make frequent claims, consider raising your deductible. This strategy applies to most types of insurance, including health, auto, and home/renters insurance.

• Auto Insurance: A higher deductible can reduce your premium significantly, especially if you’re a safe driver.
• Health Insurance: As mentioned, HDHPs can save you money if you don’t have regular medical expenses.
• Business Insurance: If you opt for a higher deductible on liability insurance, you can reduce the monthly cost without sacrificing core coverage.

Takeaway: Make sure you have enough in your emergency fund to cover the deductible if you need to make a claim.

7. Consider Short-Term Health Insurance During Gaps

If you’re between health plans—say you missed the enrollment period or are waiting for a new plan to start—short-term health insurance might be a cost-effective temporary solution.

• Low Monthly Premiums: Short-term health insurance usually has lower premiums than traditional plans.
• Limited Coverage: It’s not ideal for long-term use but can fill gaps without breaking the bank.

Quick Note: Be aware that short-term plans may not cover pre-existing conditions or certain essential health benefits.

8. Use Professional Liability Insurance Wisely

As a freelancer, professional liability insurance (also known as Errors and Omissions insurance) is essential, especially if you offer advice or services. However, there are ways to save:

• Choose the Right Coverage Level: Don’t over-insure. Match your coverage limits to the size of your contracts or projects. For instance, a freelance web developer might need less coverage than a consultant working with large corporations.
• Consider a Claims-Made Policy: These policies are typically cheaper than occurrence-based policies but require that both the incident and the claim happen while the policy is active.

Pro Tip: Look into industry-specific professional liability insurance—it’s often cheaper than generic coverage and better tailored to your needs.

Download