Insurance 101: How To Adult Like A Pro And Plan For Your Future

If you’ve recently graduated college and moved out of your parents’ house, congrats! It’s a very exciting time. Maybe you’ve nabbed your first real job, your first apartment — even your first car. Welcome to the great big world of adulting.

Don’t forget that the wide world of adulting includes insurance. For instance, in most states, you need insurance if you have a car. You should also have insurance for where you live, and health insurance is also a smart choice.

Yes, insurance can be slightly complicated. But it’s exciting stuff to learn about because it means you’re taking steps to take care of yourself and your future — and all on your own! Well, you don’t have to do it totally alone, anyway. Below I’ll look at the different types of insurance and brief you on what you need to know.

General Guidelines

Let’s start with some general advice. Shopping for insurance is not one size fits all. The cost for all types of insurance varies widely, and it depends on where you live and your circumstances.

Car insurance can vary based on your driving record and type of car, for example. If you’ve been responsible for an accident, the cost will be higher than for someone who has a spotless driving record. The cost of health insurance can vary significantly depending on your health and what kind of health coverage your employer offers. If you have a chronic health condition, it may be more, unfortunately.

Because of this variation, you need to shop around. You want the right coverage at the right price. After all, you wouldn’t buy the first pair of running shoes you saw, right? You’d look for the features you want and the price, at a minimum.

Call at least three insurance companies to get price quotes for each type of insurance. Check into what is covered. Compare premiums, which is the cost you’ll pay to have the insurance. Ask specifically what the deductible is. Deductibles are the amount insured people pay out of pocket if they have a claim, before the insurance kicks in.

If you choose a higher deductible, your premiums could be less. This can be a good deal because if you don’t have a claim in a given year, you’ll pay less.

Many insurance companies will offer a discount if you get more than one type of insurance through them. So be sure to ask.

Which companies should you call? Ask your parents or older friends and siblings for insurance companies they are happy with.

Car Insurance

Car insurance is a must if you own a vehicle. Assess the coverage you need. If your car is an older model, you may be able to skip collision and comprehensive. Why? Because your older car has less value. If it’s damaged in a collision, it may not worth the cost of the insurance premium and deductible to repair.

If you’re in the market to buy a car, be aware that insurance costs vary by make and model. If you’re seeking lower premiums, see if a defensive driving class will get you a discount.

Renter/Home Insurance

If you’re a renter, don’t think you don’t need insurance! Yes, your landlord needs insurance on their property, but your possessions are not covered by that insurance. Computers, televisions, laptops, clothes — all could be damaged if your upstairs neighbor’s bathtub overflows or a fire breaks out, right? Renter’s insurance will mean you can replace what you’ve lost in the event of an accident or theft.

If you’re a homeowner, you need insurance for property and possessions. You may be required to insure for things like floods or mold. Insurance companies in your state will let you know. It’s prudent to check into liability insurance too, just in case someone is hurt on your property.

Health Insurance

Young people sometimes question whether they really need health insurance. After all, people are often healthy at our age. Well, the thing is, accidents happen. Can you really guarantee you won’t be hit by a bus? People can get sick at any age, too. It doesn’t matter if you’re six months old, 21 years old, or 80 years old. Insurance protects you in case you are injured or get sick.

If your employer offers health insurance, you’re probably wise to take it. Employer-sponsored plans are often the best deal going. If you don’t have access to an employer-sponsored plan, there’s no shame in seeing if you can stay on your parents’ plan for a few years. If not, check into the Affordable Care Act, the government’s plan. Although it’s always important to keep tabs on what changes might be taking place with the government’s plan.

Life Insurance

Life insurance pays your dependents in case you die. It’s intended to replace the role of the breadwinner, to some degree, so dependents aren’t left with no one to provide for them. If you have dependents, whether children or older family members, you might want to check into the premium costs and what they would receive in the event of your death.

If you have no dependents, life insurance is not a necessity. People your age sometimes sign up for it because the premiums are less for people without dependents. Assess whether it is worth doing for your circumstances and income.

Insurance is an adulting essential. It means you accept that accidents and bad stuff can happen, and you need to protect against them. It’s easy to forget about at our age, and it can be confusing to maneuver when many of us have been living under our parents’ protection for so long. But it’s so important to learn about, so be sure to get educated and shop around to get the best deal for your needs.

Feature image via @pexels

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