Essential Insurance After College

An important financial responsibility after college is to make sure you have appropriate insurance.  So, what is insurance anyway?  Wikipedia defines it as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. So, there is the good and the bad.  It’s good in that you can transfer financial risk, but bad in that you’ll pay premiums for the coverage.  I certainly don’t claim to be an insurance expert, but I can tell you a few types of insurance you definitely want to get as quickly as possible.

Essential Insurance for Life after College

Health or Medical Insurance

If you’ve secured full-time employment with a company after graduating college you’ll have some different medical insurance options to choose from your company plan.  Most employers will allow you to choose insurance day one of employment.  Let me just say you would be foolish to not have any health insurance.  While you might not experience any major health issues, everyone has to see a physician from time to time for illnesses.  More than likely, you’re not married so insurance shouldn’t cost much.  I think it’s wise to choose the most expensive health insurance you can afford to reduce risk and make sure you’re well covered.  If you have a serious illness you’ll want to avoid accumulating debt to pay for treatment.

Car Insurance

Insurance Life After CollegeCar insurance is required by law if you own a car in most states.  You have to at least have liability insurance that will cover expenses if the accident is your fault.  You may not have a lot of money out of school, so choosing insurance with a $500 deductible is fine.  This means you’ll pay $500 before the insurance agency will start paying any claims.  You can get a lower deductible if you can afford it, but a higher deductible and avoiding speeding is a good way to keep this cost down.  Also, if you have a clean driving record (no accidents and speeding tickets), your premiums will be cheaper.

Renter’s Insurance

Looking back, I’m not quite sure why I never took out a renter’s insurance policy.  Although, I wouldn’t have had much to claim for a theft, it still would have been wise to cover my assets.    Make a list of all your possessions and estimate the value of them to determine how much renter’s insurance you need.  Also, make sure you have an inventory of your items handy.  If you experience a theft or loss the insurance company will want to review the inventory (proof of the loss) before paying your claim.  You might also think about shooting a video of your possessions.

Disability Insurance

It’s always a good idea to have some disability insurance.  Many people get disabled and lose their primary source of income when they can’t work.  The expenses don’t go away, but the income does.  That’s why it’s important to lessen this risk with disability insurance.  Many employers will offer short-term and long-term disability, but the long-term isn’t typically enough to replace your income.   People are often surprised when their disability payments don’t equate to their monthly paycheck, so you may choose to buy some additional insurance outside of your employer’s plan.  Just keep in mind, most graduates don’t have a family to support after school, so be mindful when determining how much you need.

Other Insurance Tips

  • Shop around.  Get at least 3 quotes for each type of insurance you’re not purchasing through your employer.
  • Try to get your insurance with the same company.  Most companies will offer discounts for insuring auto and home (or renter’s insurance) together.
  • Don’t hesitate to ask insurance companies what discounts are available.  Also, some employers can get discounts with insurance companies, so check with your HR department to determine what relationships are in place.
  • Check with your insurance agent before purchasing a car.  Some makes and models are more expensive to cover.
  • As much as you may not like it your credit is important when saving money on insurance.  Make sure you pay your bills on-time.
  • Do you need life insurance?  I would skip it for now unless you have a family.  When you get married, look into purchasing a term life insurance policy.  Avoid whole life insurance, but that’s a subject of another post.

What do you think about these life after college insurance tips?

About Jason Price

Jason Price is a family man saved by grace, passionate about faithful financial stewardship (1 Cor 4:2 NIV), soccer and the Pacific sun.

  • Jason @ Redeeming Riches

    Good post! I’m glad you mentioned disability insurance, it is an oft-overlooked form of insurance that you are so grateful for if you ever need it!
    .-= Jason @ Redeeming Riches´s last blog ..Figure Your Annuity Payments With an Annuity Calculator =-.

  • Jason

    Thanks, Jason. I think having the right amount of disability insurance is extremly important. It’s easy to say you don’t need it and would rather save the money, but I do feel its wise insurance to have.
    .-= Jason´s last blog ..Trapped by Borrowing [Devotion] =-.

  • Jeff S

    This is great advice – I never thought about Renters Insurance until I had some friends get robbed. Fortunately they had it, but it was enough of a wake-up call that I went out and got it the next day. It’s inexpensive and well worth it in case something ever happens to your place!
    .-= Jeff S´s last blog ..Financial Aid 101- How Will You Pay for College =-.

  • Backup Software :

    some insurance agencies are very greedy that is why i always take a second thought when dealing with them;~-

  • Headboard Light

    there are insurance agencies that are scam too so make sure that you deal with legit insurance agencies “;’

  • Daryl Mcfarlen


  • Nikole Hinchliff

    First-class post it is really. My boss has been awaiting for this content.