Going into my sophomore year of college, I needed to buy my own insurance policy for my new (to me, anyway) 1995 Ford Explorer. I called the insurance company my family had been with for years and told our agent I needed to start my own policy.
As one might expect, the agent asked me what coverage I was looking for. Because I was a college student with practically zero money and no knowledge of insurance, I said, “Well, what do I absolutely need?”
He told me all my options, and I chose what I thought seemed to be adequate coverage. Whenever others would talk about their insurance, I’d always say how expensive theirs was and tell them how cheap mine was – proud that I had gotten such a good deal.
Then I started my internship with PEMCO, and within two weeks I learned enough about insurance to know I had basically no coverage and was going to be an even more broke college student if I ever got in an accident. Though my premium was indeed dirt-cheap, my coverage was very limited. Needless to say, I’ve changed my policy.
To help other young drivers avoid making the same mistakes, here are six insurance tips I’ve learned this summer:
- Cheaper doesn’t always mean better: Hey, I believe you’re a good driver, but we can’t always predict what could happen. So get coverage to protect yourself. A policy with high deductibles and low coverages may save you money up front, but could cost you more in the long run.
- Ask the right questions: Once you set up your new insurance policy, make sure to ask the agent for clarification on anything you’re unsure about. Agents are trained to explain policies in simpler terms, so you can understand exactly how you’re covered and if there are any exceptions you should know about.
- Underinsured/uninsured motorist coverage is important: I’ll admit, when I first purchased my own insurance policy, I opted out on this coverage. But after learning about insurance and really understanding the importance of this option, I added it to my policy. Without this coverage, if you’re in an accident with an uninsured or underinsured driver, you may have to pay the costs of repair. Note: I said YOU, not your insurance company. Only if you have this coverage option does your insurance company cover the costs.
- Renters insurance is practically a must for college students: Renters insurance costs (for most of you) less than your caffeine bill each month. It covers things many young renters don’t think of, for example, it covers personal stuff in your car as well as your things and (some) damage in your rental home. In my opinion, the peace of mind it offers is well worth the cost of a few coffees each month.
- Updating your insurance policy is as important as updating your Twitter and Facebook statuses: Your insurance company cares about your location and what you’re up to just as much as your friends do. This information is important for pricing on your policy, risk-assessment, and making sure your covered appropriately. If there’s a change to your information that the insurance company isn’t aware of, you might lose some coverage. If there’s something you would update your friends about (change of address, new car, new family member, etc.), update your insurance company.(After all, we’re your friends, aren’t we?)
- Quotes are your friends: I know that money sometimes is the deal breaker for families and young adults, so if you’re in a tough situation, don’t be hesitant to call for a what-if scenario. Your agent wants the best coverage for you. Quotes allow you to mix and match coverage options without fully committing – therefore giving you the chance to see exactly what bang you can get for your buck.