Young adults often avoid buying insurance because they don’t understand it, don’t feel they need it or decide that they can’t afford it. This is a pretty common sentiment for many who have limited experience with insurance. Moving out of the home for the first time means that you have to take on adult responsibilities and examine your needs for insuring and protecting the safety of your assets.
Most students don’t take advantage of tenants insurance, despite owning a number of valuables. Some of the things you own – computer, cell phone, tablet, furniture and clothes – could be costly to replace in the event of a fire, theft or loss. Tenants insurance is not very expensive, but before you buy, check your family’s policy to see if you are already covered.
Life insurance is another type of insurance that is available. The necessity of life insurance for single students is dependent on your personal situation. Obtaining life insurance while young and healthy could save you money in the future. Premiums are lowest as a young adult and when you don’t have any pre-existing medical conditions. Choosing to invest in life insurance later in life or after a medical scare could result in exclusions and higher costs.
In Canada, the law requires all drivers to have car insurance. Driving without coverage is an offense punishable by fines or license suspension/seizure. Insurance for young adults can be very costly and so the more you know the better choices you can make. Insurance protects you from any damages, and covers your own medical expenses and loss of income from driving related injuries.
Insurance is based on:
Location
Your credit history
Your driving history
Type of car
Age of car
Type of insurance
Dos and Don’ts of Car Insurance
Do:
Check out your car and its premium before you purchase it. Your insurance could be more than your monthly payment.
Check into deductibles and coverages before entering into a contract.
Shop around to make sure you’re getting the best deal you can. You may receive discounts based on your education, workplace or past driving courses.
Check out online prices that deal directly with an insurer as opposed to prices obtained through a broker.
Watch for “add-ons” that might increase costs of insurance and could skew comparison shopping.
Keep the minimal amount of insurance on your car if you are temporarily not able to drive. Termination of coverage can be very expensive when you try to get it again.
Ensure that if you loan your car to a friend that he/she is insured and is a competent driver. If your car is in an accident, the owner of the car as well as the driver will be liable.
Don’t:
Don’t assume third party insurance is cheaper than comprehensive coverage. Third Party Property Car Insurance policies provide you with protection against damage caused by your vehicle to another person’s property. Third Party Property Insurance does not usually provide any coverage for damage to the insured vehicle.
Don’t be tempted to lie – insurance fraud has serious consequences. Your claim could be denied and coverage now and in the future, could be cancelled.
Don’t let your insurance lapse due to non-payment. Reinstating insurance can be difficult and result in higher premiums – talk with your insurer if you have a financial problem.
Need advice? We offer money coaching to Mac alumni.
When you are assessing a job offer you might want to think about the total compensation rather than just the salary. It may actually be better (and cost effective) to take a lower paying job with benefits than one that does not offer such extra’s.
If you take the higher salary, figure out how you much insurance will cost, how you will meet these needs, and whether you can close the gaps before you sign the contract.
If you are in a relationship, you could talk to your partner about being added to their plan.
Check into offers of insurance by McMaster’s Alumni Association. You may receive discounted rates for home, auto, life and other coverages.
There are different types of life insurance – whole life and term insurance. They both have different advantages and disadvantages, before making decisions make sure you understand all the options. A consultation with an insurance broker is recommended.
Insurance can be difficult to get and if you are applying for insurance on your own (not with an employer) you may need to get a physical examination and provide a detailed medical history. You may not get approved if you have a pre-existing condition.
Consider long term disability as a necessary insurance to keep your dependents and yourself in reasonable financial shape. This is particularly important if you are considering self-employment as this coverage is essential.