Your own renters, auto and perhaps life insurance policies are the key types of protection most young adults may want to consider. Many coverage and cost options are available for each type of insurance, and an experienced agent can help you sort through your choices.
Leaving Mom and Dad’s Policies
If you’ve been covered in the past by your parents’ insurance, it may be time to bid their policies a fond farewell. Once you’re living on your own, you may need insurance in your own name.
Why? As you begin to manage life on your own, it’s important that you choose the coverages that fit your specific needs. Also, having your own policies can help you build an “insurance history” of your own (similar to a credit history) that may save you money in premiums over time.
Renters Insurance
You may think of renters insurance as coverage for your belongings โ clothes, computer, TV, etc. โ in case theyโre damaged or stolen. While personal property coverage is a key part of most renters insurance policies, points out that a renters policy typically provides liability coverage, too.
The liability portion of a policy may help provide protection if, for instance, a visitor is injured at your apartment or if you accidentally damage the rental โ through a kitchen fire, for instance. This coverage may help cover medical payments, legal fees if youโre sued and property damages for which youโre found legally responsible.
Renters insurance may also help pay your increased living expenses (which can keep you from schlepping home to Mom and Dad) if you temporarily have to live somewhere else while your place is being repaired due to a covered loss at your rental home or apartment.
Premiums will vary based on location and the coverages you choose. A local agent can help you chose the policy that’s right for you.
Auto Insurance
Many of her young customers worry about affording auto insurance premiums. โDonโt worry โ youโre not 16 anymore!โ she tells them. She helps customers select their own coverages and suggests ways in which they may be able to lower their premiums.
For instance, she says, purchasing car insurance from the same company that provides your renters policy may result in savings, as some insurers will offer a “bundling” discount. If you commute via public transportation or arenโt a frequent driver, some insurers also offer low-mileage discounts. Be sure to ask your agent whether you may qualify for other discounts, too.
Still not sure if you’re ready to hold your own policy? Keep in mind that some states have rules about how long you can remain on your parents’ auto policy. Check your state laws to learn about any insurance requirements that may affect you.
Life Insurance
Young adults โ particularly if theyโre not married or donโt have kids โ often overlook life insurance. However, there may be benefits to purchasing a policy while you’re young. โFirst, youโre the youngest and probably the healthiest youโll ever be. If you buy life insurance now, youโll likely get the lowest possible rates and keep them for decadesโ.
You may also want to consider life insurance if your parents financially depend on you (or may in the near future), and would not be able to get by if something happened to you.
As a young adult, you have a lot to consider when you’re venturing out on your own. A Fam insurance agent can help you navigate the process and answer questions to help you chose the protections that you feel are right for you.