Graduation is upon us again, and if you’re stepping out into the world for the first time you’ll need to consider your insurance coverage. Of course, you want to keep expenses low, but you also need adequate coverage.
Here are a few insurance considerations for recent grads to keep you safe, protect your belongings, and minimize costs.
If you moved away from your parents, you should really consider getting a Rhode Island renter’s insurance policy. Your landlord’s policy only covers the building, not your belongings.
You may not think you own much, so why bother? Take an hour and do a quick inventory using a free mobile app like III Inventory, offered by the Insurance Information Institute. Include your computer, smartphone, MP3 player, CDs, DVDs, TV, clothes, furniture, books, and anything else you’ve got laying around your apartment. It doesn’t take long for the value to reach thousands of dollars. Using a mobile app also allows you to record your belongings on video or in photos as proof of ownership – which will be helpful if there ever is a loss. You should also store your data in the cloud in case something happens to your phone or computer.
Fortunately, renter’s insurance is fairly inexpensive and your insurance company may offer you a discount if you get both your auto and renter’s insurance from them. When selecting your policy, make sure that you choose replacement cost coverage so you’re covered for the full amount if you need to file a claim. Otherwise, the insurer pays you for the value of your items, less depreciation.
Also ask your insurance agent about increasing your liability coverage. For usually less than fifteen dollars, it could save you from hundreds of thousands dollars in expenses if someone injures themselves in your home.
If you’re found liable in court, the injured party can come after you when you start to earn more money. A judgment could destroy you financially no matter how much you earn, but potential high earners provide the injured party with a definite reason to wait.
Recent graduates often leave school with debt and they usually don’t earn huge salaries. Consequently, they tend to scrimp on their car insurance.
Regrettably, the state minimums for car insurance do not provide sufficient protection if you’re in a costly accident or one that causes serious bodily harm. The state minimum in Rhode Island for a covered accident is $25,000 per person for bodily injury, with a maximum of $50,000 per incident. The minimum only allows $25,000 for damage to another person’s property.
This may seem like plenty of coverage, but consider how quickly hefty medical bills can accumulate. If your liability insurance only covers $25,000 and the person’s bills surpass $100,000, you’ll carry the burden for the difference.
Also consider how much a car costs today. Would $25,000 cover a new vehicle if it were declared a total loss? If your insurance does not cover the other driver’s loss, either the driver or their insurance company will sue you and come after the rest. A high-end vehicle or import could easily cost twice that amount, or more.
Higher deductibles mean lower premiums, but what happens if you need to replace an item immediately? Can you afford to pay $500 or $1,000 for another car or computer when you’re just getting started after school? What if you need the item for work?
Sometimes paying a higher premium makes sense, so talk to your agent. If you choose a higher deductible, you will need savings to pay the deductible should something happen.
Local Agents vs Buying Online
Low online prices may attract you, but using a local, qualified professional has many benefits you shouldn’t dismiss.
First, they’re in your neighborhood and they get to know you. They can adjust your coverage as you progress through life and offer you loyalty discounts. Since they know when something changes, they can also alert you to better products and further discounts as you qualify for them.
Second, when you shop online, you do all the legwork. If you go with a local insurance agency, your insurance agent does the work for you and accesses many insurers to find one that suits your needs and budget. They can often surpass the coverage and rates you can find yourself online.
Third, they have a brick and mortar office and they’re in it for the long-term. When you shop online, you never know what will happen if you need to file a claim. Why take the chance? It’s free to talk to an agent and it could save you money now and for years to come.