Graduating from college is an exciting and scary time for young adults. This milestone brings many life changes involving work, money, living arrangements and more. As they learn to navigate the real world, it’s critical that young adults understand how their insurance is affected. Here are five basic insurance coverages that all college grads should consider:
- In Wisconsin, drivers are required to carry auto insurance. If a graduate already owns a car and is moving for a job, where they keep and register the car can impact coverage. It’s important for new graduates notify their insurance agent about these changes to make sure their current coverage will still apply, or if they will need a new policy.
Homeowners or renters insurance
- College grads starting out may not own a home yet, but may rent a residence. To make sure their possessions are protected, homeowners and renters insurance offer comprehensive coverage whether at home or traveling. Liability insurance included in renters and homeowners coverage also helps protects against the risk of being sued.
- New grads may find a job with an employer that offers group term life insurance coverage. However, those with children may find it worthwhile to buy additional term life insurance or permanent life insurance, which builds cash value over time.
- Under the federal health care law, children can remain on their parent’s health insurance policy until age 26. This should be discussed with the parent’s employer insurance contact. If parents have an HMO type policy and the child moves away from the area of service, there is limited coverage.
- Disability insurance is vital but often overlooked. It provides income when a person is injured or disabled, whether on the job or off. At Neckerman, we can calculate the right amount of coverage to help a person live while recovering.
New college grads may want to lean financially on their parents’ insurance coverages as long as possible (though mom and dad might feel a little differently!). While that makes sense, it’s not always viable.
Parents of new graduates also should take this time to review their own insurance policies, as there may be opportunities to reduce premiums when children move out of the home.