With commencement season in full bloom, college grads – and their parents – are celebrating the conclusion of a great chapter in their lives, even as they anticipate what’s coming next. First full-time jobs, signing their first leases, and maybe even buying their first cars. With those firsts come some additional decisions that most coming straight from college may never have thought about. Insurance, for one.
Sure, many think about health insurance because it’s required. In fact, the number of uninsured millennials is at an all-time low of 11%. But what about protecting that new car, the apartment or the business a young entrepreneur may have started straight out of school? Here are some tips as you transition from campus to the real world.
- Sometimes bad things happen to good people. So prepare. What happens when you forget to unplug the iron and a curtain is hanging a tad too close? How about when a burglar snags the pearl necklace your grandmother gifted you? According to an InsuranceQuotes.com survey of 1,000 adults, less than one-third of 18- to 29-year-old renters have insurance covering their belongings and liability. But not because they don’t think about buying an insurance policy. Instead, millennials often underestimate the value of renters insurance and overestimate its cost. According to the Independent Insurance Agents and Brokers of America, the average cost for renters insurance is only $12 per month, or $144 per year, for $30,000 in property coverage and $100,000 in liability coverage. If you purchase your renters insurance and car insurance through the same company, you’ll often get an extra discount on both your renters and auto insurance.
- Watch out for the other guy. You may be a super safe driver, but you’re sure to encounter a few careless drivers each day on your new commute. You can never really prepare for what the road has in store. You want to keep your monthly premiums low, but you want to make sure you have enough coverage if you get in an accident. Hone in on auto insurance features that can save you money short- and long-term. For example, look for insurers that offer credits on your deductible for each year of safe driving (sometimes called disappearing deductibles). Some insurers also offer accident forgiveness as an option, so one accident won’t cause your insurance rates to rise.
- It’s never too early to plan ahead. As you pay off your student loans, sign your first lease, and look into buying a new car, it’s smart to protect all of your assets at once even if you don’t think you don’t have significant expenses. Life insurance can help pay for final expenses, mortgages, college tuition, car loans and other debts if something happens to you. It can also help protect your co-signers. Since they’re doing you a favor by co-signing, don’t leave them liable for your expenses. With life insurance, you can lock in rates for 15 or 20 years, it’s smart to take advantage of the good rate you’re likely to get now while you are young.
- Lean on an expert. We all love the convenience of buying things online, but when making important decisions that we don’t know much about it’s best to lean on the experts who will help you choose the right product and be there when trouble hits. So ask around about an independent insurance agent who can help you make sense of it all.
As you embark on this next chapter, congratulations on all you’ve accomplished thus far. The best is yet to come. Just make sure you cover yourself from that occasional hiccup in life’s plans.