Insurance Concerns and the Soon-to-be College Graduate

I have noticed a lot of activity at the local college where I walk.  Windows are being washed, trash is being collected, and landscaping beds are being weeded and pruned – all in preparation for the Class of 2012 graduation ceremonies.  It is an exciting time in the life of a college (soon-to-be) graduate, but it is also a stressful time because it brings along so many changes.  Even before the cap and gown is donned, before the band begins to play Pomp and Circumstance, before all the congratulatory wishes, there are so many decisions to be made.  Will he/she go on to graduate school or enter the work place?  Will he/or she live at home or rent an apartment with friends/colleagues?  What will he/she do about insurance?  Ah, there’s a question most young people probably aren’t thinking about as graduation day approaches…but it is a fact that insurance needs will change for the college graduate.

Here are the key insurance concerns for the college graduate to consider:

1.  Auto insurance:  While many college students carried their own insurance, a majority have been covered under their parents’ policies.  It’s important to get the best coverage for the best possible price.  Be sure you have the appropriate amount of coverage for the following:

a. Bodily Injury Liability:  Applies to injuries that you cause to someone else.  Consider buying more than the state-required minimum to protect your assets.

b. First Party Benefits (in PA):  Can cover medical payments, lost wages, accidental death and funeral costs.

c. Property Damage Liability:  Pays for damage you, or someone driving your car, may cause to someone else’s property.

d. Collision:  Pays for damage to your car resulting from a collision with another car, object, or as a result of flipping over.

e. Comprehensive:  Reimburses you for loss due to theft or damage caused by something other than a collision with another car.  A higher deductible is one way of lowering your premium.

f. Uninsured and Underinsured Motorist Coverage (in PA):  Reimbursement if you are hit and injured by an uninsured or hit-and-run driver.

2. Renter’s Insurance:  If you are renting an apartment or house after you graduate, it is important to understand your landlord’s insurance will only cover the costs of repairing the building if there is a disaster.  You need your own coverage to protect yourself and your belongings.  Renter’s insurance provides protection in 3 ways:

a. Coverage for Personal Possessions:  Covers the cost of your possessions in the event of a theft, fire, or other covered disaster.  Determine that you have enough insurance to replace your personal belongings.

b. Liability Protection:  Covers you against lawsuits for injury or property damage done by you.

c. Additional Living Expenses:  Covers you for any additional living cost incurred after a loss.

3. Health Insurance:  Going uninsured should not be an option.  Don’t jeopardize your future.  Be familiar with the options:

a. Employer based:  Understand the coverage and how much, if any, you will need to contribute.

b. Individual:  If you are young and healthy, individually purchased health insurance may be an affordable option for you.

c. Your parents’ health insurance plan:  New health care regulations permit you to remain under your parents’ health insurance policy until age 26.

d. Short-term:  Give thought to short-term coverage if you expect to have employer-based health insurance within six months.

So, as graduation day approaches, take a few minutes to talk to your soon-to-be graduates about their changing insurance needs.  Chances are – with the myriad of decisions they have facing them amidst all the excitement of those upcoming commencement ceremonies – they aren’t even thinking about insurance!  It’s important.  And, of course, I also think it’s important to talk with an independent agent about your personal needs and concerns to make sure your proud graduate is properly covered