Is Insurance Really Necessary?
When you are young and single, the last thing you probably think about is insurance. From car and health insurance to home or renter’s insurance, monthly premiums can add up quickly and seem unnecessary if you perceive that you are not benefiting from owning insurance.
Recently, I overheard a conversation between two graduating college seniors. They were talking about whether or not they needed insurance at all because all the extra coverage seemed unnecessary. But when it comes down to it, there are certain types of insurance coverage that are absolutely necessary, even if you are on a tight budget.
Even if you don’t make any claims under the coverage, the extra security insurance can provide, just in case of an emergency, is well worth the money you pay.
Here are three types of insurance that recent college graduates definitely should not live without:
1. Health Insurance
With Obama’s recently passed Health Care Reform Bill; you may be covered under your parents’ group health insurance plan until you are 26. Although you are probably at the peak of your health at 26, health insurance is one of the most important investments you can make. Even if you’ve got an impenetrable immune system, an out-of-the blue visit to the emergency room or the X-Ray office can cost thousands (and potentially hundreds of thousands) of dollars. And you certainly don’t want to learn the hard way about the retail price of certain prescription medication. Often times, you can get health insurance through your employer to help keep your costs down.
2. Renter’s Insurance
While homeowners insurance should be a given if you own your own home, most renters overlook the significance of renter’s insurance. Contrary to popular belief, your belongings are not covered under your landlord’s insurance policy. Renter’s insurance can be extremely affordable and may even cover items stolen out of your car. Unfortunately, many people often underestimate the value of their belongings. From your computer and television to all of your clothes, the value of the things in your apartment could possibly be in the thousands. Renter’s insurance can help protect your personal belongings in your apartment from theft, fire or other unfortunate situations. If you also have a car, you may even get a discount by getting both policies form the same company.
3. Auto Insurance
Auto insurance is not only required by law in many states, but it is also a good investment to protect yourself from many of the costs of damages when you are in an accident. If you live in an area with high rates of vandalism or car theft, it’s also a good idea to purchase comprehensive insurance which can provide coverage when your car is damaged by a storm, vandalism, or fire note caused by collision. And the good news is, you don’t need to skimp on car insurance to cut costs. Most insurance companies offer discounts if you take an approved defensive driving course, if you bundle your renter’s or home and car insurance policies and if your car has certain safety features, so be sure to ask about them when talking to your agent.*
*Certain insurance coverages are subject to deductibles, or the amount of money you agree to pay out-of-pocket (on your own, without the insurer’s help) when you make a claim.KathyD is a guest blogger. In exchange for sharing this content, GoodHandsCommunity.org has compensated her via cash payment.