|Congratulations, high school and college graduates! You are entering a new life stage, and these are exciting times for you. You will likely need to make some important insurance-related decisions soon. By better understanding insurance policies and your needs at this stage, you can get the most out of the money you spend on insurance.
You have grown up seeing clever insurance commercials featuring crafty tag lines on television and social media. But how much do you really know about insurance and the coverage you need now that you have graduated? One website dedicated to unbiased insurance information for consumers is InsureU.org, hosted by the National Association of Insurance Commissioners. Another is www.ksinsurance.org, our website of the Kansas Insurance Department (KID).
The following is a list of questions and suggestions for you to contemplate as you talk to an insurance professional about your specific needs.
1. Renters insurance can protect your personal property against damage or loss and also protect you in case someone is injured while in your residence. If you plan to rent an apartment or other residence, do you need renters insurance? Remember, your landlord’s insurance does not cover your personal property.
2. You might be sharing your apartment or house with roommates. In this case, you likely need an individual policy that covers you and your possessions if something should happen. Speaking of your items, have you taken an inventory of your personal property recently? NAIC has a smartphone application for that, and KID has an online inventory booklet you can download.
3. As you sort through job prospects, do not make the salary your only consideration. Health insurance is perhaps the most important job-related benefit. Study the health plans prospective employers 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 health plan until you turn 26.
4. Will you be purchasing a vehicle soon? Remember to factor in the cost of auto insurance. If the vehicle was a graduation gift, or you are jumping off your parents’ auto insurance policy, it is time for you to discuss your coverage with an agent.
5. If you drive an older vehicle that is paid off, you might consider dropping collision or comprehensive coverage as a way to cut expenses. Talk to your insurance professional about the cost of those coverages versus the value of your vehicle.
6. In most states, the law requires you to maintain auto liability insurance to cover losses caused by your negligence, and sometimes you are required to carry personal injury protection coverage. To avoid penalties, pay your premiums on time and do not let your coverage lapse. Have you filed a claim recently? Ask your insurance professional about accident forgiveness, which may lower your rates.
7. There are differing opinions about the importance of purchasing life insurance unless you support individuals whose livelihood is dependent upon your income. As a young single, you should make choices based on your finances, health and other circumstances. Consider consulting a financial or insurance professional to learn more.
These prudent steps, as well as asking the right questions of your insurance professional or our department Consumer Assistance Representatives, can help you control your insurance costs. Check out the InsureU site for the young singles and young families section, then, if you have more questions, use our chat feature on the www.ksinsurance.org site to conduct a conversation with one of our representatives.
By Ken Selzer, CPA, Kansas Commissioner of Insurance