One thing that freelance writers discover early in their career is that there is no sick leave or holiday pay in this job. In most cases, this doesn’t bother us, or we’d go back to working nine-to-five in an office. You start to miss all these things more, however, when an accident leaves you out of action.
This happened to me just over a year ago, when my car was demolished by a drunk driver at 120 kph. I have no memory of this, but I awoke later in pain, to see the fire department slicing through the roof of my car. I was carried out in a stretcher and spent a night in hospital. Between the pain and the painkillers, I wasn’t at full capacity for the next couple of months. As I was not responsible for the accident, medical expenses were paid by the NRMA (the only choice in the ACT, but fortunately they were fine – provided I didn’t charge them for natural remedies).
While medical expenses were fairly straightforward, another issue was not so simple: loss of income. As I’ve kept in generally good health during my decade as a freelancer, and have previously had the good fortune to avoid any major injuries, the problem was new to me. I have no regular income, save a lowly-paid weekly Fairfax newspaper column, but usually have enough work to keep me busy, sheltered and fed. Happily, apart from my column, I had no deadlines over the next two weeks.
So how could we calculate “loss of income”? If I were a salaried employee, this would have been simple. I previously had loss-of-income insurance with one of my credit cards, but when I discovered that it didn’t encompass the more variable income of a freelancer, I cancelled the insurance.
The accident happened in November, which was bad timing. As a lifestyle and travel writer, the end-of-year “silly season” is a prime time for assignments. Most years, I get plenty of newspaper assignments around that time of year – often the result of several hours’ pitching. Naturally, this income was all speculation. Instead, we had to rely on my relatively modest earnings of the previous quarter, when I had spent more of my professional hours on book promotion. Dividing my quarterly earnings by 13 was an imperfect method of working out my fortnightly income, but it was the best one available to me.
Another problem was with my income protection insurance. I didn’t have any. I had looked this up in the past, but the policies I had investigated were rather expensive. A colleague once had a policy with FAI/Tower (as part of a package), but she cancelled her income insurance after it was costing her some $700 a month. As most freelancers earn less than staff journalists of similar experience and calibre (who, of course, should have no reason to pay income protection insurance), this caused a considerable dent in her earnings.
Had I known, I could have arranged a policy through Media Super, which is far more reasonable than through an insurance company. Media Super’s income protection cover is generally based on 75% of your income. (If your monthly income is $1,000, the maximum cover available to you is $750 per month.) Of course, working out your income is another matter, and you might need to speak to the good folk at Media Super about that.
I had no knowledge of Media Super’s insurance rates, but as it was a motor accident, I relied on the NRMA to provide me with insurance cover. (Happily, I was not responsible for the accident, or I would have shouldered some of the costs.) This meant that I would eventually receive a payout, including pain, suffering… and loss of income. However, as they planned to pay in one large lump-sum payment, I would need to wait until I had mostly recovered. This, I was soberly informed, could take up to three years.
Happily, I was prepared for this. While it might occasionally seem easier said than done, a freelancer should always ensure that they have money stashed away for just such an occasion. Though I am told that I should expect my payout soon (far less than three years from the event), it has taken over a year and counting.
Fortunately, though not fully healed, I was able to work full-time at my desk (and even travel for work) within a couple of months. Had this not been the case, I might have had slightly more trouble paying for food and rent.
That’s one of the less glamorous parts of freelancing. Unless you have a lot of money saved up, you should work out some form of loss-of-income insurance. You never know when you will need it.