Insurance
- Types of Insurance
Insurance allows you to have peace of mind by guaranteeing payments if something bad happens to your or the things you own. You make a contract with an insurance company that says you will make monthly payments, called premiums, and in return, the insurance company will give you a lump sum payment if a specified event happens in the future. That contract is called an insurance policy.
There are many types of insurance, including health, car, rental, home, disability, and life insurance. You are probably familiar with health insurance, which pays if you need medical attention. Car insurance can pay if you are in an accident and need repairs to your car, and rental insurance can pay you if you rent an apartment and you are robbed or the apartment burns down.
Insurance lowers your risk by ensuring that you can afford to pay for any disastrous events that happen in life.
Insurance can be expensive depending on the type of insurance you get, the amount it will payout, and the circumstances needed to trigger a payout. Some types of insurance are legally required, such as car insurance if you own a car. However, some types of insurance are not required, but you may want to buy an insurance policy depending on your situation. For example, life insurance is not necessary, but if you have children or a spouse who depends on your income you may want to purchase a life insurance policy.
- Who Needs Insurance
There are a lot of factors to consider when deciding if you need insurance. Everyone should have some sort of health insurance, and most students may be covered by their parents’ insurance or UC SHIP.
If you own a car or drive someone else’s car often, you should also get some sort of car insurance. If you drive someone else’s car, they should be able to add you as a driver to their policy for a lower cost than buying your own.
If you live in housing owned by the university, there is a good chance that the rental or home insurance on your permanent residence (where you live when you’re not at school) covers your belongings that you keep in the dorm. However, it is best to check with the person who owns the home or renters insurance to make sure. If you like in an apartment or share a house with roommates, it is best to get a rental insurance policy.
Most college students and young adults may not need a life insurance policy or disability policy. Usually, a life insurance policy is a good idea if your income is the sole or main income for your family. If you work in a dangerous job that could potentially harm you and keep you from working, you may want to purchase a disability insurance policy. Some employers may provide free or low-cost life and disability insurance based on your job.
- Where to Get Insurance
Health insurance is usually provided by your university or your employer if you work full time. Some employers do provide insurance for part-time employees, but that is not usually the case. If you are under 26 and are in college or graduated from college, you can stay on your parent or guardian’s health insurance until age 26. If these options do not work for you, you can purchase health insurance through the insurance marketplace in your state of residence. www.healthcare.gov can connect you with your marketplace.
Insurance that covers property, like your home and car, can be found through many insurance companies. It is best to get price quotes from multiple insurance companies to make sure you are getting the best rate.
Life and disability insurance can be purchased like property insurance, but they may not all be available from the same company.
Insurance brokers are independent people licensed to sell you insurance. They are also called agents. These brokers can take your insurance and gather many quotes from different companies for you. Because these brokers can form relationships with some companies, they may be able to find you cheaper policies than if you found quotes yourself. However, brokers include a fee for their service, so the cost can vary when compared to buying directly from an insurance company.
- What to Do Once You Have Insurance
Depending on the insurance policies you have or have purchased, there are multiple things you can do.
If you have health insurance, try to get a copy of your insurance card. You may have multiple cards if your health insurance has different providers for medical, dental, and vision insurance. You will need your insurance cards when you go to a new doctor. They are also good to have on hand in case of an emergency.
If you have car insurance, try to keep a copy of your policy in your car. If you get pulled over or into an accident, you will likely need this information.
For any property insurance, it might be a good idea once a year to get quotes on insurance like you did when you originally purchased your insurance policies. As you age and your claim history changes, insurance companies can offer you different quotes. This may result in a policy being significantly cheaper than it was when you got a quote a year ago. It is free and does not affect your credit score to get insurance quotes.
