Now that you’ve graduated, there are a lot of decisions and choices that need to be made. You don’t have to spend a bundle on insurance. A few dollars in the right place can make a big difference.

Car insurance

If you’re no longer living at home, it’s time to get your own policy. Even though you may not own a lot, purchase a healthy amount of liability insurance. If your car is damaged or totaled in an accident, it could prove to be a financial hardship. If you are found liable for an accident, the tab could run into hundreds of thousands of dollars which could destroy you financially. If you’re on a tight budget and need collision and comprehensive coverage, go with higher deductibles. A couple of hundred dollars is much easier to come up with than a few hundred thousand if your liability limit is exhausted.

If you are shopping for a new car, insurance rates can vary widely. Consider this when shopping for that new car. Obviously a Honda is going to be much cheaper to insure than a Mustang but some rates will surprise you. The rate on a BMW may be cheaper than a Sentra. Always check with your agent before you buy.

Renters Insurance

Even if you don’t own much, the cost to replace the items could surprise you. For a few dollars a month renters insurance can replace your items, provide you with a place to stay if your apartment is uninhabitable due to a covered loss and give you liability protection if someone sues you from an injury suffered at your place (don’t skimp on the liability). Many apartments are now making renters insurance a requirement.

Life Insurance

Most young people don’t need a lot of life insurance because no one is depending on their income. One thing to consider is if you have a lot of student debt and a family member or friend has cosigned for a private student loan, they will still be obligated to pay. While federal student loans are cancelled upon death, most private loans are not. Even after you die, your cosigner may still have to pay Sallie Mae. Term insurance is usually very affordable when you are young.

Disability

Many employers offer this as part of their benefits. If not, you may want to consider buying it yourself. Disability insurance promises to pay if you become disabled and aren’t able to work. There are two types of disability insurance. Short term which covers up to a year and long term which kicks in after a waiting period and covers for a specified period (which could be your retirement age).

Health

Everyone needs health insurance. Many employers will cover part of your premiums. Medical treatment is expensive and can wipe you out financially so this is not the type of insurance you want to forgo.  If your employer doesn’t offer health, find out what options you may have under your parents policy. If that is not an option, shop rates on individual coverage.

If you would like to learn more, contact us, we’d be glad to help.

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