Insurance Advice for Recent Graduates

High school and college students frequently complain that all their years of schooling fail to prepare them for the nitty-gritty aspects of life in the real world.  Things like buying and leasing property, balancing a checkbook, creating a budget, and managing a household are often difficult for new graduates who are living independently for the first time ever.  One of the biggest problems American grads have is dealing with insurance companies.  Typically, these individuals were carried on their parents' insurance policies prior to graduation, and a change in residence and schooling status has caused them to be bumped off in search of a new, personal policy.  

Health insurance generally comes with the aquisition of a new job, limiting a young adult's choices to the small selection of options offered by the hiring company.  Car insurance, however, is something that must be purchased independently through an insurance agent or online broker. Recent graduates should consider the following when searching for a car insurance policy:

  • Comprehensive coverage is unnecessary unless the vehicle you own is still under lease or the title is held by a financial institution, or unless your vehicle is relatively new and valuable.
  • Young drivers -- and young men in particular especially with points and/or a poor record -- are often subject to higher insurance premiums. Make sure to plan your budget accordingly.
  • When shopping for auto insurance, look for a service that will allow you to compare quotes from multiple car insurance agents.  This will save you time -- and money!
  • Don't forget to compare the deductibles and other fees associated with each policy you consider.
  • Read everything before you sign any paperwork at all.  Make sure that the insurance agent answers any questions you have completely.
The next type of insurance of importance to young adults is homeowners or renters insurance rates.  Ready to move out of their parents' homes and into an apartment or house of their own, many new graduates forget to consider things like insuring their posessions and property.  Here are some tips for them:

  • If you are fortunate enough to buy property soon out of college, you may want your mortgage broker to handle your homeowners' insurance so that your insurance is paid for when you pay your mortgage each month.  
  • There are advantages to paying your own home insurance, though.  This enables you to shop around for a better price, retain your money instead of having it held in escrow until the premiums are due, and control which company ends up receiving your insurance business.  
  • When renting, consider how much it would cost to replace your possessions in the event of theft or fire.
Finally, the last type of insurance a new graduate may need to consider is life insurance.  Whether or not it is needed immediately will depend largely on the young adult's family situation.  Someone who is married or co-habitating, and/or who has children will want to purchase a life insurance policy as soon as possible to protect their loved ones in the event of an untimely death.  A trusted insurance agent or financial planner can help determine what size policy an individual might need to cover his or her salary, debt, and other costs of living.

New graduates are advised to take their time with all of these important purchases, even if that means continuing to live at home for an extra month or two while they gather information and prepare a budget for their independent lives.   
 
 







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