The world of insurance for recent college graduates can be a lot to tackle. Having the correct guidance can make a huge difference. Whether you are trying to buy a new car, rent an apartment or buy a new home, insurance is always needed. Here is a quick outline of insurance considerations for individuals finishing up college and looking for a new beginning.
Thinking about handling insurance on your own as an independent adult is often that last thing on a college graduates mind. Believe it or not, starting at a young age and understanding insurance and how it works will produce a better outcome for you in the long run. It may seem easier to stay on your parents’ insurance, but making the change helps you become more independent, reduces their risk, and helps make everyone more knowledgeable about the process.
It might be more expensive on your own initially. This is due to many factors including the fact that your credit score may not be as strong as your parents and the loss of some discounts like the multi-car discount. However, there might be certain discounts such as a Higher Education Discount, Good Driver, Defensive Driving and/or Prior Insurance Loyalty if listed on your parents’ policy as a driver to take advantage of to keep your cost as low as possible.
When young adults move out of their parents’ home and/or title & register a car in their own name they should be sure the car insurance is written in their own name with the proper address listed to prevent gaps in coverage. One of the most dangerous gaps is that when a young adult moves from the parents’ home, the parents’ insurance no longer covers them should they be in any vehicle other than the vehicle insured on their policy. Think about instances where you are a passenger or borrow a friend’s vehicle. Perhaps you have rented a car in your own name while on vacation. Your only coverage in these instances comes from the Rental Car contract so you had better buy their insurance. Better yet, had you had a policy in your own name you would likely not have any gap. At the end of the day, the goal is to have your auto covered correctly and understand the coverages you have.
If a recent graduate returns home to live with their parents they are considered a household member on their parents’ homeowner policy. This means the Liability Coverage and Personal Property automatically extends to them. However, you should be aware of what your parent’s coverage is in case you have some items of high value that you are concerned with. Items that may need to be scheduled on a policy specifically to be covered properly include items like expensive jewelry, artwork, or sports memorabilia. The other coverage that will be extended will be the Personal Liability. This is coverage that responds if you are liable for any property damage or personal injury caused to another. However, if instead of moving back home, you rent an apartment or buy a home, then you will need to secure a Renters policy or Homeowner’s policy as you no longer have coverage under your parents’ policy.
Renter’s insurance will cover your personal property and personal liability while you rent a house or apartment. This protects your belongings in the event of theft or damage to that property, as the landlord is not responsible to insure a tenant’s belongings. This will also provide Liability if you cause damage to another person’s property or cause injury to someone else. If you purchase a home, then a Homeowners policy will be needed to protect the actual home, your belongings, and your personal liability.
No matter what your course after graduation, it is important to communicate with your independent agent to ensure your insurance is handled properly and that you protect yourself, others, and all that you hold dear.