6 Important Insurance Musts: A Post-Grad Guide to Adulting

Now that you will likely become a renter, there are important features of a renters policy that you should know about. As a post-grad, you’re now on the hook for your living expenses. This may tempt you to cut costs when it comes to your renters insurance.

However, we know from personal experience and experience as insurance agents that it’s not always a good idea to tempt fate and hedge your bets against life’s “what-ifs”. (Life usually responds to that mentality by saying: “Challenge accepted.“) So, here is what one of our insurance experts had to say about keeping liability coverage on your renters policy:

“Liability is important regardless of whether you rent or own a home. It’s there to protect you and your family in the event that someone gets hurt on your property or is trying to sue you for damages. You are held legally liable for any cost resulting from injury or damages that occur on your property. That’s why it is important to have enough liability on your renters or homeowners policy to protect your assets from being liquidated.

We would rather have the insurance company write the check than you lose your hard earned life’s work! If you don’t have a significant build-up of savings, stocks, bonds, or a second property after college, you are not alone – but you’re not off the hook yet! If someone happens to get hurt at your new apartment and you don’t have renter’s liability, you’re still held liable for their injury. We always recommend speaking with your agent and making a plan on how much liability you need on your policy before reducing any coverage. “

Many post-grads reward themselves for graduating or landing that first job with a new set of wheels. But why stop splurging there? If you truly want to protect that new car, it’s ill-advised to skimp on auto insurance musts by opting out of vital coverage. While physical damage covers the cost to repair damage to your own car, it’s provided on what is known as an actual cash value (ACV) basis. 

ACV payment may be less than you owe if the car is totaled in an accident, due to depreciation in the loss settlement being applied. It may seem like a costly investment upfront, but at the very least, purchasing gap coverage  can protect you against potentially large out-of-pocket expenses following an accident. A good rule of thumb is to remember that liability only pays for the other person, while physical damage is required to cover damages to your car!

You may, like many who are both new to the working world and those who are veterans in the workforce, think your employee provided life insurance is sufficient. However, there are exceptions, and your employer provided coverage may not include some important insurance musts. Our insurance experts have some insight to share:

“As much as we hope the new job you just landed is going to be the same place you work for the next 30 years, the reality is people change jobs every couple of years, and with that, your employee benefits may change. It’s important to have your own life insurance policy established outside of work to protect you at all times! In addition, many employee provided life insurance policies are not enough to cover the cost of a funeral, any outstanding debts, or help replace an income your family may depend on to maintain the standard of living to which they are accustomed.

If you just graduated and do not have anyone depending on you yet, now is the time to talk to your agent about life insurance. Young people are usually in good health, which means better rates! When you are young, there is also time to start a Whole Life or Universal Life policy that can accrue interest overtime. Plan ahead by setting your future up for success and protecting your family.”  

You’ll likely have the opportunity to now enroll in group health coverage at your new job as a post-graduate adult. In most cases, you’ll fare better under a group policy than trying to fly solo with your own coverage. According to our employee benefits experts, If you’re offered group health insurance through your employer, there are some important factors to consider:

“First and foremost, your employer will contribute towards a large portion of your monthly premium for coverage. Any additional cost for yourself or dependents is the employee’s responsibility but can be purchased using pre-tax dollars, which is truly beneficial. Having access to an employer sponsored group health plan typically allows for access to better networks (Doctors, Hospitals, Specialists) and better plan designs (Lower Deductibles, Lower Out-of-Pocket Maximums, and/or HSA’s “Health Savings Accounts”).”

After toiling away at earning your diploma and landing that first job, investing your hard-earned money in a retirement plan probably doesn’t seem like one of the insurance musts and is likely furthest from your mind. However, it’s never too early to start thinking about your retirement security. In fact, the earlier you start planning, the more you will get to reap the fullness of your rewards during your golden years. While there’s never an ideal time to start investing in your retirement, the earlier you can start, the greater the reward down the road. 

Whether it’s your auto and renters or home insurance or your life or health insurance, opting for the cheapest possible coverage doesn’t always pay off when the unexpected rears its ugly head. If you’re worried about overpaying for coverage you may not need, it’s worth the conversation with a knowledgeable insurance agent to discuss your options before settling for the bare-minimum plan.