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Thursday, April 18, 2024

College 101: Insurance Essentials

As I get closer to graduation (stop the ride, I want to get off!), I know that I’m going to have to deal with a whole lot of “adult stuff” very soon. One of those things is insurance, and it already feels like a hassle to me. My parents are always on me about checking out benefits for jobs and getting renter’s insurance for my off-campus apartment. However, I find insurance websites stressful, and I don’t always feel like I understand what I’m getting and why. Experts, can I trouble you for a crash course in insurance?

Insurance is a simple concept, but it can get complicated fast. At its most basic, insurance just means pooling risk with others; swapping a regular premium in exchange for some protection from sudden expenses. However, insurance can work in all sorts of ways. For instance, the most basic forms of car insurance cover other people’s cars, not yours, so you don’t have to pay if you wreck another car in an accident. Health insurance companies want you to take advantage of their policy that includes paying out for regular doctor’s visits, so that preventative care spares you both from future visits. What you need to know about particular types of insurance can often go far beyond the apparent basics. So let’s talk about practical insurance knowledge!

Let’s start with health insurance. It does matter, and you should certainly take a close look at the policies offered by prospective employers. What should you look for? The two primary expenses associated with health insurance are the premium and the deductible. The premium is what you pay every month to be covered. The deductible is the chunk of change you’ll have to pay out for care before the insurance starts helping you. Keep in mind that some things will be covered before the deductible kicks in. For instance, you’ll likely only have to handle a small co-pay when you visit your primary care physician, even on cheaper plans. Generally, the pricier the plan, the lower the deductible, and the better protected you are from sudden high costs.

Other things that differentiate high-end plans include coverage for vision and dental care. If you don’t have those options, you may want to consider getting separate policies to cover them, advises the New Brunswick, New Jersey dental team.

Next up: car insurance. You’re required by law to hold car insurance if you drive, but keep in mind that the extent of your coverage does matter. Basic car insurance will make sure you don’t go broke if you wreck someone’s Ferrari in an accident. However, you should consider paying for advanced coverage, like vehicle replacement, if you fear that having your car stolen or totalled would do significant financial harm to you. As with health insurance, you’ll see deductibles and premiums.

Your parents are right about renters’ insurance, too. A good policy will protect your belongings, giving you financial compensation if they are stolen or destroyed by accidents, such as fires. Homeowners’ insurance does many of the same things for homeowners, while also covering the property itself. Many young people skip renters’ insurance, but it’s a very good idea to grab a policy. They are often very affordable, and they help enormously if and when something goes wrong.

There are many other useful forms of insurance besides these, of course. You will likely someday want to look at life insurance, which is particularly important as you age, and perhaps start a family.

Try not to be intimidated by all of these types of insurance! Set aside some time and figure out your current coverage. Online portals and apps should make it relatively easy to find the paperwork for any policies you already have, say the experts behind one popular policyholder portal module, and you can always choose to pick up the phone if you find that easier. After that, chart out the types of insurance you still need and do some basic research on company websites to get a sense of what you can expect to spend. Once you have a good policy, you won’t have to worry about this sort of legwork for a while!

“Safety is a cheap and effective insurance policy.” - Author Unknown

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