One of the discussions my wife and I have had since our daughter graduated from college is how soon to transition insurance payments. We have happily covered auto and health insurance throughout college but had told her that once undergraduate work was completed, she would be footing the bill. If you are a recent college graduate, here’s insurance you don’t want to live without, and some tried and true ways of getting the best deal on each policy.
Insurance every college graduate should have
Renter’s Insurance. When you were living in a dorm, your personal belongings were most likely covered under your parent’s homeowner’s policy. However, now that you’re out on your own, you will need to protect your items when you move into an apartment or rental house. You may not realize that the landlord’s policy doesn’t cover your belongings; it mainly covers the building, systems, and appliances that were there when you moved in. If something should happen – say a burglary or storm that causes leaks – you will need insurance to replace stolen or damaged items. Fortunately, renter’s insurance is relatively inexpensive.
Auto insurance. Many people think about auto insurance as just covering the physical car you drive, but it’s much more than that. It may cover damage caused by uninsured drivers, injuries to you or others sustained in an accident, and even damage to other structures (for instance, if you run into a building). Depending on the value of your car, you may choose to purchase full coverage or simply a liability policy if your car is older and worth less.
Health insurance. You may have been covered while at college under your parents’ health insurance. In fact, many of you may be able to continue using your parents’ insurance until you turn 26. When the Affordable Care Act was passed, it allowed children under 26 to stay on their parents’ policy even if they got married, weren’t claimed as a tax dependent, or could qualify for employee-sponsored insurance. However, that doesn’t mean you want to stay on your parents’ policy, or that they will want to continue paying the bill. If you have the option, consider signing up for health insurance at work. Perhaps it’s cheaper to do that than to stay on your parents’ policy, and they may even help you pay for a few months as a buffer until you’re more ready to pay on your own.
How to purchase insurance
Not trying to be a downer here, but buying insurance is one of the inner circles of Hell. The policies are long and boring, you often are dealing with overly-aggressive sales people, and insurance only seems to get more expensive. However, even though it’s not a fun process, you have to balance the pain with the fact that you are required to have some types of insurance and definitely want to spend the least for any insurance you purchase.
Educate yourself. If you are starting out and just need renter’s and an auto policy, take the time to research both. For a renter’s policy, you will need to know the approximate value of your belongings and the amount of a deductible you will want to pay (a deductible is the amount you would have to cover before insurance pays anything). Make sure to get a replacement cost policy (which will pay to replace property at its new value) rather than cash value (which will only pay what your property is worth on the day of your loss).
For car insurance, you need to determine if you want a complete policy or simply liability, if you’re comfortable with only the required minimums in your state, and again what level of deductible you’re willing to live with.
Comparison shop. Some companies offer quotes online, for others you may meet with a representative. You can also choose to talk to an insurance broker who represents several companies. You may want to work with one of each – a broker, a company rep, and online. If you have any questions, meeting with someone can help you better understand the products you’re purchasing. Just make sure to compare the same levels of coverage with the same deductible, and get several quotes.
Research the top companies for their claims service. You’ve seen the commercials. Someone has a disaster and the insurance people show up immediately to repair the damage. Great ads, but more often than not, not true. Dealing with insurance company claims adjusters is no fun. There’s an inevitable delay while you find contractors to repair the damage or wait for the insurance company’s contact to find time in their schedule. Then the insurance company has to approve the repairs, which often takes weeks more. Unfortunately, this is the average response – some companies are much worse. Try to find a company that gets high ratings on their claims process just in case you need to use it one day.
Try to get an even lower price. If you find you have two or more quotes from companies that provide good claims experiences, try using the lowest priced quote to get a better deal. Let’s say your online company offers car insurance at $1,000 per year, yet another company is at $1,200. Call the second company and tell them you’re going with the cheaper priced company, can they do anything? Worst case is they will say no, but you might save hundreds for a 10-minute call.
Read your policy. Before making the final purchase decision, read your policy. Make sure you understand all the terms and conditions, and that you are receiving the levels of coverage you actually negotiated. No matter what was said on the phone, what’s in writing will constitute the terms of your insurance.
Online comparison
Like everything else, you can purchase insurance online, whether from a specific company or through independent sites. Policygenius, The Zebra, and Insurify offer platforms that allow you to compare insurance offers in one place. I would still suggest you call at least one broker, but these sites can offer valuable information as a baseline before you reach out.
Rinse, repeat
Congratulations! You’ve bought insurance, hopefully for a good deal and with a reputable company. Unfortunately, you aren’t done. Insurance companies are like cable companies – they will constantly increase your bill unless you comparison shop every two to three years. So, save your notes and be ready to do this again in a few years!
Photo by Vlad Deep