As a young adult starting their independent lives, you may be thinking of purchasing or renting an apartment or car. As your expenses increase in the coming years, insurance can play an essential role. Finding affordable policies should not be difficult. Under 25? Affordable insurance as a young adult should be nearly guaranteed as long as you understand the factors that can influence premiums. Unfortunately, many underestimate how essential having the appropriate type of cover at this stage in their lives can be, so we have put together some helpful advice to get you off on the right foot:
Auto Insurance For Young Adults
Purchasing a car requires insurance, with rates depending on factors like driving record and location. Young drivers under 25 may see higher premiums compared to their elder counterparts. But there are ways you can bring down these rates and make insurance more affordable. If you are attending school full or part time, and full-time student, you may qualify for discounts on your auto policy. Insurance companies typically provide discounts to students who maintain a B average or above. You could also ask your parents to add you as a driver on their policy, which will lower rates by expanding coverage over all their cars as well. There may also be reduced-cost programs available specifically to young drivers in your area.
Homeowner’s Insurance For Young Adults
If you are purchasing a house, homeowner’s insurance is an invaluable way to safeguard it against fire, theft and other unavoidable events. Homeowner’s insurance can be especially crucial if you are first-time homeowner, because young adults may lack enough savings to rebuild their home after natural disaster strikes. Professor Carole Philbin of University of Wisconsin-Milwaukee suggests that first-time homebuyers purchase high-risk home insurance policies. As with any type of policy, umbrella insurance policies tend to be more costly than standard policies; however, their increased coverage and safety precautions likely justify any extra expenses incurred. Dr. Philbin also advises young adults buying their first home to purchase sufficient coverage in case something unexpected should arise or building materials prices increase unexpectedly.
Health Insurance For Young Adults
Health insurance is another important factor for young adults to consider. While most health insurance plans require you to be 25 or older to stay on your parents’ plan, there are a few exceptions. If you are attending or have graduated from college, you may be able to stay on your parents’ health plan while you figure out your next steps. Dr. Philbin also recommends that young adults stay on their parents’ health insurance until they get to a point in their careers when they can afford to buy their own health insurance. While premiums are likely to be expensive, they will most likely be much lower than what you would pay if you bought a health insurance policy on your own.
The Bottom Line: Start As You Mean To Go Forward
As a young adult, it is vital that you establish sound financial habits. Insurance plays an integral part of protecting ourselves financially. While young adults might put off purchasing coverage until later, this could prove costly in terms of both premium cost and coverage availability if purchased early – plus getting health coverage early will provide immediate protection without needing to wait for policy purchase to make your payments.
You can also refet to The Most Importance of Buying Insurance
Final Words: Wrapping Up
As a young adult, you might not see insurance as essential – yet it actually provides many important protections to you in various forms. Auto and homeowner’s policies offer financial coverage if someone sues you for medical bills in an accident, while health plans cover you for unexpected accidents or illnesses. Even if it feels unnecessary at times, keeping yourself protected gives peace of mind in case something arises that requires coverage; getting it sooner than later saves money in premium payments due to unexpected emergencies.