What Do New College Grads Need to Know About Insurance?

Are you a new college grad? If you recently completed your degree, take a look at what you need to know about insurance coverage and your new post-college life.

Do You Need a New Auto Insurance Policy?
Do you need to drive to your first post-college job? If you have a car, you need auto insurance. This is a legal requirement, without exception. Even though you need an auto insurance policy, as a new grad with an entry-level job, you may not have the extra income to afford this additional monthly cost. But that doesn't mean you should risk driving without a policy.
Before you risk your license and drive uninsured:
  • Talk to an agent. The insurance agent can help you find a policy that meets your needs — in terms of coverage and your budget. A qualified agent can help you to better understand the different types of coverages and find ways to cut costs.
  • Talk to another agent. Did the first agent you called give you the best price possible? If you're not sure, or the price seems steep, talk to another agent. Compare both the rates and types of coverage. You don't want to sacrifice coverage for a lower rate.
  • Ask about bundles. Do you have another type of insurance, such as homeowners or renters insurance? Ask your agent about how the price may change if you bundle multiple policies.
  • Check your credit. There are several factors that go into the price you'll pay for an auto insurance premium. Along with the type of coverage, deductible, and add-ons, your credit score plays a role. If you have no or low credit, work on improving your score.
Some insurance companies may offer discounts. Discuss potential discounts with a licensed insurance agent. This may help you to get a better policy (with more coverage) at a lower price-point.
Do You Need Renters Insurance?
Did you spend the last four years living in a dorm or fraternity/sorority house? Now that you're a college grad, it's time to move on and rent your own apartment. Before you move into your first post-college adult home, talk to an agent about renters insurance. While this type of policy isn't mandatory (in the same way auto insurance is for drivers), its benefits include:
  • Personal possession protection. Who pays for losses of personal property, such as jewelry or furniture, in your rental? If you don't have insurance, you do. A policy that covers personal possessions can offset costs after a fire, theft, vandalism, or other (select) disaster.
  • Liability. This type of coverage can protect you financially from costs related to lawsuits for property damage or bodily injury. Talk to your agent about the specific types of incidents and damage your policy covers. Not every liable act is included in every policy.
  • Additional living expenses. ALE (or additional living expense) coverage may pay for a hotel, meals, or other expenses you have as a result of extreme damage to your rental apartment.
  • Theft, a natural disaster, or another type of damage to your apartment can cost you in replacements, repairs, or other types of bills. Even though renter's insurance adds another cost to your growing list of financial needs, it can save you money.
Do You Need Homeowner's Insurance?
As a new college graduate, you may have a job that more than pays the bills. If your first job comes with a salary that allows you to buy a home (instead of rent one), you need homeowners insurance. Like auto insurance, homeowner's insurance is necessary. Most mortgage companies won't approve a loan without this type of coverage.
A homeowner's insurance policy can help to offset costs and may cover (depending on the policy):
Your new home's structure. Fire, a storm, or another type of disaster can destroy your home's structure and make it uninhabitable. A homeowner's policy may pay for part or most of the costs to repair or replace your damaged investment.
  • Personal items. Like renters insurance, many homeowners insurance policies also cover damage or theft of personal belongings. Discuss the type and amount of coverage with your agent before you choose a policy.
  • Liability. Again, like renters insurance, homeowner's policies can protect you against lawsuits for property damage or bodily injury.
  • Additional living expenses. You may need to live in a rental or hotel after serious damage to your home. This type of coverage pays for some or all of the costs related to your living expenses while you can't live at home.
The specific policy you choose may cover varying degrees of costs. According to the Insurance Information Institute, the HO-3 policy the most popular type. The HO-3 covers damage from fire/lightning, windstorm/hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, falling objects, volcanic eruptions, the weight of snow/ice, and other select hazards.
Are you a college grad who needs auto, renters, or homeowners insurance? Contact L.A. Insurance for more information.