| With owning, or even just driving a car comes the responsibility of insurance. Auto insurance is the most common type of insurance you may have to worry about now, but at the same point, you will be responsible for other types of insurance, such as renter, life, and health insurance. Insurance protects you by transferring the risk of huge losses to an insurance company. By paying a relatively small premium each year, you can protect yourself from the risk of losing a lot of money in the future. When you are ready to buy insurance, it is important to shop around for rates and types of coverages. Both can vary. | |
| Auto Insurance | Most states have financial responsibility laws that require you to have auto insurance. An auto insurance policy is a package of several types of coverage: |
|---|---|
| Property Damage Liability | provides money if you, members of your family, or anyone driving your car with your permission damages the property of others. |
| Medical Payments | overs medical expenses of anyone injured in your car, regardless of who is at fault. |
| Uninsured and Underinsured Motorists | protect you if you're involved in an accident with a hit-and-run driver or a driver without insurance. |
| Collision Insurance | pays for damage to your vehicle resulting from a collision, regardless of who is at fault. |
| Comprehensive Coverage | pays for damages to your vehicle from theft, fire, flooding, or other hazards. The amount you pay for auto insurance depends on the types and amounts of coverage you buy, where you live, your age, driving record, age of your car, and sometimes your sex and marital status. You may be elegible for discounts if you're a safe driver or a good student. Ask your insurance agent about other factors affecting discounts. Typically, someone under the age of 18 will have auto insurance under a family policy. This can help bring down the cost of the individual premium. Statistically, younger drivers are at higher risk for accidents, therefore premiums tend to be higher. If a younger driver has a good driving record and good grades, discounts will apply to the family premium. Also, non-smokers can be eligible for discounts. Keeping a clean driving record makes a great difference in premiums, too. For example: |
| - | The insurance premium on an 18-year-old driver with a 1995 Pontiac Grand AM would be approximately $365.00 every six months. |
| - | The premium on the same driver, same vehicle, but with a DUI on the driving record would be: Approximately $2,200 every six months. You can see from this example the importance of a good driving record. |
| Tenant/Renter's Insurance | When you rent your first apartment, you'll need tenant's insurance to protect your belongings against damage or loss. It also provides coverage to protect you if you injure someone, damage property, or if there's an accident in your apartment. Later when you own a home, you'll need homeowner's insurance. |
| Health Insurance | Most young people will be covered under their parents or guardians policies while they are under 18 and/or enrolled in college (to a certain age). When you're out on your own, health insurance is very important to have. A serious illness can wipe out your savings if you don't have adequate health coverage. Make every effort to have adequate coverage, either by purchasing health insurance yourself or having it partially provided by your employer. |
| Life Insurance | Life insurance helps replace lost income in the event of the policyholders death. |
| Disability Insurance | When you're on your own, no matter what your age, it may be important to have disability insurance to replace some income if you are unable to work because of an illness or accident. |
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