Now is the time to start thinking about your personal insurance coverage, without the benefits of your parents or university coverage. Getting hurt or losing property without holding insurance is a risk you don't want to take.
There are four basic types of insurance that you need to think about.
Let's take a closer look at each of them now.
1. Health insurance
With rising medical costs, health insurance is a key type of insurance to consider. In the event of a serious accident or illness, you don't want to be uncovered!
Here are a few key things you should know about health insurance.
- In the case that you do still qualify as a dependent on a parents' policy, some insurance plans also specify a maximum age, usually twenty-three to twenty-five years.
- Many employers' medical plans require a waiting period before coverage for new
employees starts. So even if you have begun a good job with good benefits, you may have some period of time when you are not covered by any health insurance policy.
- You may want to consider a plan that can cover you during the time when you no longer qualify as a dependent but are not yet eligible for your own plan from work.
2. Homeowners insurance
If you're planning on buying a home, you need to have an understanding of homeowner's insurance. For most people, their home is their single most valuable possession -- and their biggest investment. Homeowners insurance protects your investment as well as you and your household possessions.
Homeowner's insurance typically has two main sections: Section I covers the property of the insured, and Section II provides personal liability coverage to the insured. Almost anyone who wants to own or lease property needs homeowner's insurance of some kind.
HerTip: Homeowner's insurance is also often required by the lender as a component of the mortgage requirements.
3. Renter's insurance
Perhaps you're thinking, "I don't need to worry about insurance for my home because I'm only renting/leasing an apartment." The fact is, however, that your landlord's insurance doesn't cover your personal property. It will only cover damage to the actual construction. Renter's insurance will cover losses and damage and can insure you in the event that someone endures an accident while on your property.
Renter's insurance is offered by most companies that sell homeowner's insurance and can be purchased in different levels of coverage. You can insure your property two ways:
- Actual cash value -- This coverage considers the age and condition of the item at the time of the damage or loss, and pays only what it is worth to replace it with an item of similar condition.
- Replacement value -- This pays you the cost to replace the covered item with a comparable new item. Replacement value policies usually cost more, and may have restrictions.
4. Auto insurance
If you own a car, understanding auto insurance is a must -- most states won't even issue a registration without it. Accidents happen. No matter how short a distance you have to travel, you'll need to protect yourself and those around you should something go wrong.
While the size of the auto insurance package is primarily up to the owner to decide, most states have enacted compulsory insurance laws requiring drivers to have at least a minimum amount of auto liability insurance.
Remember:
Insurance is not something you can afford to be lax about. One accident, one surgery, or even one cold can set you back by more than you can imagine. What's more, doctors report late or missed payments just as quickly as do credit companies.
Continue to: Part V. Finding a place to live: home, sweet home
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