College Grads and Insurance -Coverage in the ‘Real World’

One of the surest signs of Spring is spotting graduation caps and tassels. It’s the end of the school year and you college graduates around the country are preparing to leave the safety of your college campus and venture out (as cliche as it sounds)  into the “real world”. And whether you are moving back into your parent’s house for awhile or right into your own place- your insurance needs and coverage are most likely about to drastically change. From health, auto and home insurance coverage- there’s a few things you need to know. So before you head off to all those graduation parties, take a few minutes to think about this…

Americans aged 19-29 are at the highest risk of not having health insurance coverage.  Young adults account for 13 million of the 47 million uninsured Americans.  (U.S. Census Bureau)

Health Insurance is one of those things that most people don’t want to think about very often. As with other types of insurance, health insurance usually doesn’t become a main concern until you actually need it. Most college students who are eligible for coverage under their parent’s plan become ineligible once they graduate- or at the age of 25- whichever comes first. This of course depends on your specific coverage and health insurance company. However, if you are being dropped from your parent’s plan you should find your own coverage. And you may have a few options for this.

In a perfect scenario, you will find a job right out of college and your employer will offer health insurance as one of your medical benefits. Having employer paid or partial employer paid benefits means your employer will pay for part- or all- of your health insurance. Even if it’s only partially paid- you will typically get a discount on the portion that you are responsible for and it will be deducted right from your paycheck.   Keep in mind that most companies require you to work 3 months before you become eligible for medical benefits- you might want to consider purchasing your own plan in the meantime. (Just make sure you won’t be penalized for canceling your temporary plan when your employer plan kicks in)

Unfortunately, given the current job market- not everyone is going to be lucky enough to land a great opportunity like this. If you are one of the hundreds of thousands of college graduates who won’t find a job right after graduation you should find a solution for your health insurance needs. Get some health insurance quotes from the top companies and see what kind of rates you are eligible for.  Even some basic coverage is better than nothing and it can really pay off in the long run.

Your Auto Insurance needs may change as well after graduation. Have you been driving your parents car for the past few years? Are you about to buy your first? Oftentimes college students will get listed as drivers on their parents policy and stay on their insurance plan while going to school. However, if you are graduating and about to buy your first car you will need to get your own policy.  The good thing is- you are probably not a brand new driver. If you’ve had your driver’s license for a few years like most college grads you will have some experience under your (seat?) belt which means car insurance companies may reward you with lower rates as opposed to if you have just gotten licensed.

When you shop around for car insurance rates, make sure you ask your car insurance specialist about all available discounts and see what you are eligible for. Some insurance companies offer discounts for college graduates as they have proven to be safer drivers, statistically, than those drivers without a college degree.  Remember, auto insurance is required by law- unlike health insurance- so this coverage is not only recommended but necessary!

And then there’s Homeowners Insurance. Since you don’t own a home you are probably wondering why you should even be concerned with home insurance. Home insurance  protects not only your home, but your personal possessions including computers, clothing, furniture, etc. While you were in college your parent’s homeowners policy most likely offered coverage for your belongings as long as you were living on campus. However, if you are moving off-campus and into your own home or apartment you will need your own coverage. If you are planning on renting, you should consider renter’s insurance which will provide you with coverage for your possessions in the event they are ruined in a covered peril (theft, fire, wind, hail, etc).

If you are planning on buying a home in the near future, you should purchase a full homeowners insurance policy which will protect not only your possessions but also the structure of your home, other structures on your property, provide liability coverage and loss of use coverage. (Read a full description of homeowners insurance coverage).

It’s a lot to absorb, I know, but thinking about these things now can save you money down the road in the event you are not covered. Reading about and understanding different types of insurance makes it a lot less scary.  Remember to ask your insurance agent as many questions as you can so that you truly understand what is covered under your various policies and what is not. Good Luck from Home Insurance.com!