Insurance Considerations for the New Graduate
Graduation is an exciting moment in life. Celebrations are in order with family and friends, while planning for the next phase of life is also underway. During the planning process, new graduates should become familiar with how the different insurance coverages can protect them.
If you plan to own a home
Homeowners insurance may pay for repairing or rebuilding your damaged home, temporary shelter if your home is uninhabitable, damage to your home’s contents and your personal belongings that are damaged or stolen. It may also cover medical expenses of injured guests, damage to someone else’s property and legal fees and court judgments if you’re found to be liable. To protect you against accidentally underinsuring your house, many companies offer guaranteed replacement cost policies.
The cost of homeowners insurance
The cost of homeowners insurance is affected by many factors, including the type of policy and amount of coverage chosen, additional coverages selected, deductible levels, location of property, and its type, age, and condition.
If you plan to rent an apartment or other residence
Renters insurance can protect your personal property, such as a television, computer, bicycle and clothing, against damage or loss. It also protects you if someone is injured at your residence.
Maintaining auto insurance
Auto insurance is one of the most frequently purchased types of personal insurance. In fact, Ohio requires that you comply with the state’s financial responsibility law. The law requires each Ohio driver to demonstrate an ability to pay for injuries to other people or damages to other people’s property if the driver causes an accident. Buying insurance is one way to show financial responsibility and the easiest way to comply with the law.
Coverage for your vehicle
The two basic components to auto insurance coverage are liability and property damage coverage.
Most auto insurance policies cover your liability for bodily injury, and property damage. The policy may offer coverage for uninsured/under-insured motorists coverage.
Physical damage coverage may include both collision coverage and comprehensive coverage (which pays for non collision related damage). Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car.
If you’re jumping off your parents' auto insurance policy, it's time to discuss your own coverage with an agent. If you have an older car that’s paid off you might consider dropping collision or comprehensive coverage as a way to cut expenses.
The cost of auto insurance
Auto insurance premiums are linked to the type of vehicle driven. If you’re buying or leasing a new car, check the insurance rates before you make your final choice. For example, SUVs, convertibles and performance vehicles typically cost more to insure than other cars.
Health insurance options
Study the health plans prospective employers or colleges provide and make inquiries about your options and the out-of-pocket costs. Weigh this against the cost of remaining on a parent's plan. Current law allows you to stay on your parent's plan until you turn 26. Health insurance can also be purchased through an insurance agent and at www.healthcare.gov
Deciding about life insurance
There are differing opinions about the importance of purchasing life insurance if you’re a young adult unless you support individuals whose livelihood is dependent upon your income. Consider consulting a financial or insurance professional to learn more.
If you have questions about insurance, contact the Ohio Department of Insurance at 1-800-686-1526 and visit www.insurance.ohio.gov for information. New graduates can also use the services of an insurance agent.