Around the country, millions of students are about to embark on a new chapter of their adult life. Some are preparing to attend university while others are graduating and entering professional careers.
Most twenty-somethings find themselves focused on moving to a different city, adjusting to a new job, and managing their own finances–not insurance. Here’s a handy outline to help advise your young adult on what insurance coverage they might need.
Renter’s Insurance
Renter’s insurance covers more than just your personal property, while this is one of the many reasons people purchase this affordable coverage the policy also provides; protection for the loss of use of your apartment should it be damaged and critical liability protection should you be sued.
So how do you determine how much insurance you need?
A great place to start is by creating a home inventory list. Look at all your belongings and try to place a value on what it would cost to replace these items. Keep in mind, that expensive jewelry like your engagement ring, diamonds, and heirlooms should be separated out and specifically itemized or scheduled. Things to consider: actual cash value or replacement value, deductible levels, and liability limits. Read more about renter’s insurance here.
Auto Insurance
Auto Insurance is required by law in all but two states; New Hampshire and Virginia do not legally require drivers to hold an insurance policy. But if you live in those states, that doesn’t mean you should go without insurance. Here are some key components of a personal auto policy:
- Physical Damage: This covers the cost of repairs to your car.
- Liability: Protects you if you are at fault for bodily injury and/or property damage
- Medical: Covers the cost of injuries to the policyholder and any passengers.
- Uninsured and Underinsured Motorist Coverage: coverage for the damages above and beyond what the at-fault driver’s policy covers.
Variables impacting your premium include age, gender, credit score, and car make and model.
- Age: Younger drivers have higher insurance rates. Most premium rates will begin to decrease after the age of 25.
- Gender: Men tend to pay more for car insurance overall, though the difference is slight — about 1%. The difference is most pronounced for teens and young adults.
- Location: Living in a city with higher crime rates where break-ins and theft are likely to occur, can increase the rate of insurance.
- Credit Score: Some insurance companies take credit score into account. Data has shown that drivers who have better credit scores tend to be in fewer accidents.
- Car Make/Model: The type of car you drive also has an impact on your premium. Expensive makes and models cost more to repair or replace, so insurers often charge higher premiums for coverage.
Life Insurance
If your college grad has student loans (and what college grad doesn’t) he/she likely has a co-signer and often that comes in the form of a parent. Have you considered what happens to the loans if the primary borrower unexpectedly dies before the loans are paid off?
In most cases, student loan lenders will call upon the co-signer to pay off the debt. In fact, the debt often becomes immediately due in full. Life insurance, which provides enough coverage to pay off the loans in the event of the student’s unexpected death, will ensure the parents don’t face sudden financial hardship in addition to the loss of a child.
There is no one-size-fits-all for life insurance. It’s completely dependent on your needs, health, and lifestyle. An Avery Agent can refer you to one of our Life Insurance partners for a proper discussion.
Identity Theft Insurance
According to the Javelin Strategy and Research, 1 in every 5 fraud-related crimes was reported by a victim between age 20 and 29. College students are a popular target for identity thieves because they:
- often share personal data such as phone numbers, addresses, and locations through social media.
- may not use effective passwords to protect their accounts.
- are unlikely to shred personal documents and/or credit card/bank statements before throwing these in the trash.
While it’s important for students to learn to create effective passwords and shred documents, purchasing identity theft insurance can also be a good way to safeguard against financial loss.
If identity theft insurance is not already included in your homeowners or renter’s insurance policy, see if you can add it, consider getting a standalone policy, or subscribe to an identity theft protection service like LifeLock which provides dark web monitoring for suspicious use.
Identity theft protection plans typically include credit monitoring, scanning for threats, and assistance with recovery efforts. When choosing a policy, research the deductible levels, coverage options, and policy limits. It’s prudent to compare products from several insurance companies.
Life after college is exciting and stressful all at the same time; don’t let insurance be another worry. Avery’s hands-on approach will help you choose the right insurance for your young adult.
Call an Avery Agent today to discuss what insurance solutions are right for you: 800-759-7579.
