Congratulations Class of 2013: Now It’s Time to Graduate to Your Own Insurance!
Posted by LPL Risk Management on
It’s a rite of passage for college students to don cap and gown and march across the stage for graduation ceremonies- in fact, according to the National Center for Education Statistics (NCES) almost 1.8 million students will graduate with a bachelor’s degree in 2013. As those 1.8 million make the transition from undergraduates to careers, pursuit of advanced degrees or back into mom and dad’s basement, it’s critical that they understand how walking across the stage may have changed their insurance needs.
While every individual has unique needs, here are a few insurance coverage options that all college grads should consider and evaluate their need for:
Auto insurance. A shiny new car, whether owned or leased, holds appeal for newly employed college grads. Auto insurance helps cope with the expenses of accidents, vandalism or theft. A lender or leasing company that finances the vehicle will require auto insurance. Car accidents can create large liabilities for a driver, so the liability portion of auto coverage helps protect the bank account. Plus, auto insurance covers many legal expenses if a driver is sued. If a graduate who already owns a car is moving, where they keep and register the car, especially from one state to another, can impact coverage. It’s important to let your insurance agent know about these moves to make sure your current coverage will apply or if you need a new policy.
Homeowners or renters insurance. College grads starting out may not own a home yet, but may rent an apartment or a house. To make sure your possessions are protected renters insurance offers comprehensive coverage whether at home or traveling. Liability insurance included in renters and homeowners coverage also helps protect against the risk of being sued. There usually are limitations on renters coverage within a group house—a typical post-graduate arrangement—so it is important to understand the details of a policy.
Umbrella policy. An umbrella policy can provide another level of protection. For example, if you’re renting an apartment and accidentally start a cooking fire that burns down the building and destroys the personal property of other residents, the coverage limit on your renters policy may not be enough to cover the damage, so having an umbrella policy could provide you with additional coverage.
Health insurance. Under the new federal health care law, children can remain on their parent’s health insurance coverage until age 26. With unemployment and under-employment high among those in their early twenties, this can provide many recent grads with health insurance until they can get it through their employer or an individual policy. Individual policies can be pricey and differ significantly in coverage, so talk with a Trusted Choice insurance professional about what makes the most sense for your situation.
Life insurance. New grads may find a job with an employer that offers group term life insurance coverage. However, those with children may find it worthwhile to buy additional term life insurance or permanent life insurance, which builds cash value over time.
Disability insurance. This is a vital but often-overlooked insurance coverage. It provides income when a person is injured or disabled, whether on the job or off. A Trusted Choice insurance professional can calculate the right amount of coverage to help a person live while recovering.
As a new college grad you may want to lean financially on parents’ insurance coverage as long as possible. While that may make sense depending on your circumstances, it’s not always viable. For instance, auto insurance companies will require an owner or lessee of a car to carry their own coverage. Parents of new graduates should also take this time to review their insurance portfolios, as there may be opportunities to reduce their premiums if a child moves into their own place, or gets their own car.
We can help new grads and their families navigate these waters, to provide sensible coverage that won’t break the bank. Best of luck, Class of 2013!