A College Graduate’s Guide to Property & Casualty Insurance
By: Advocate Brokerage
If you have just graduated from college, CONGRATULATIONS! You have just completed a HUGE accomplishment and you have every right to be proud.
If you are the parent of a college graduate, CONGRATULATIONS! We are sure you are proud of your child’s amazing accomplishment.
Either way, we thought it might be helpful to share some information about Property and Casualty Insurance. Below you will find a guide to the types of insurance that should be considered when you are starting your new adventure of life on your own.
To the graduates: Welcome to Adulthood!
To the parents: Feel free to share this blog with your kids and let them know that we are here for them (or you) if they have any questions!
If you have a car, you likely have some experience with Auto Insurance. There are two main parts to your car insurance policy and we want to take a moment to discuss each one. Personal auto insurance is a policy that provides coverage for liability and physical damage coverage.
- Liability coverage is what pays the damages if you are at fault for an auto accident and another person is injured or has damage done to their car or other property. Liability coverage is required (at a specified minimum amount) by nearly every state in the United States of America. While some will only purchase a policy with the minimum amount required by law, it is often not enough coverage to take care of the damages in the event of a serious accident. In addition, some states are much more litigious than other states, and in those states the pay-outs can be extremely high.
- Physical Damage Coverage is often referred to as comprehensive and collision. It covers the cost to repair your own car in the event of an accident. You choose the deductible, and that is the amount you are self-insuring (meaning it is what you are willing to pay out of your own pocket in the event of an accident). Keep in mind that the higher the deductible, the lower the cost of the monthly premium. There are many good reasons to take a high deductible; specifically, each and every accident you report comes with a cost and dings your record. When you take a $1,000 deductible it keeps you from putting in small losses. We especially discourage putting in claims when there is no other party involved.is often referred to as comprehensive and collision. It covers the cost to repair your own car in the event of an accident. You choose the deductible, and that is the amount you are self-insuring (meaning it is what you are willing to pay out of your own pocket in the event of an accident). Keep in mind that the higher the deductible, the lower the cost of the monthly premium. There are many good reasons to take a high deductible; specifically, each and every accident you report comes with a cost and dings your record. When you take a $1,000 deductible it keeps you from putting in small losses. We especially discourage putting in claims when there is no other party involved.If you have a newer vehicle, it is a good idea to consider an Agreed Value policy. A policy with Agreed Value means that the value of your car is determined before a loss and in the event of an accident; you are guaranteed a check for that amount without deprecation during the policy year. This will help avoid any out-of-pocket expenses (except for your deductible) in the event of an accident.
Auto Accident Tip From Your Insurance Advocate
When involved in an accident, if safe, take photos of the scene, the exact spots where the cars hit, the license plate of the other car, and snap a photo of the other driver’s license and insurance card. If there are ANY witnesses that were not passengers in either car, get their names and phone number for an insurance statement. A witness can make a huge difference in determining fault.
More than likely up until this point, you have been living as a dependent of your parents either at home, in a college dorm or in a rental apartment while you were still going to school. If you have graduated from college and are heading out on your own, you should consider purchasing a homeowners policy, and there are a couple of different types depending on if you are renting or buying a home.
- Renters Insurance is something you will need to purchase if you are renting an apartment or house after graduation. Renters Insurance will cover your personal belongings in the event of a fire, burglary, or other weather-related emergencies. Obtaining renters insurance means that if there is a burst pipe that destroys your property, or you suffer a burglary, your insurance will cover the cost to replace your damaged contents, assuming the claim is over your chosen deductible.Renters insurance also provides some Loss of Use coverage which means that if you need to live elsewhere after a covered loss, your insurance will pay for it.When purchasing renter’s insurance, it is a good idea to create an inventory of all of the items you own and the approximate value of each item. This will help in two ways; one it will help you determine the amount of coverage you need, and two it will help should you need to file a claim after a loss. If this is unrealistic, take a video with your smartphone of the inside of your home, open the drawers, cabinets, and closets, and film everything so that you have a permanent record.
- Liability Insurance offers you protection in the event that you cause damage to someone else’s property, or someone is injured and you are responsible for the damages. While both your auto insurance and your renter’s insurance will offer some degree of liability coverage, the amount may not be enough. We can help you to determine appropriate coverage limits.
We love building relationships with our Advocate Brokerage families. If you are a current client of Advocate Brokerage, it has been our pleasure to help you and your family find the right property and casualty coverage to meet your needs.
If you have children that are making their way into adulthood, now is a good time to have a conversation with us so that we can advise you as to any updates that may need to happen to your current policies. Additionally, we would be happy to help your child with any insurance questions they may have so please encourage them to give us a call!