INSURANCE TIPS FOR YOUNG ADULTS

24 July 2009 9:00 a.m. Eastern
Credit Union National Association, Edited by Nicole Thompson

Most young people don't think insurance is important, that is until they need it. Because young adults aren't wallowing in disposable income, insurance often gets lost in the shuffle of rent, gas and other routine bills. Here's how to protect yourself against the unexpected without spending a fortune.

Many young adults need only three types of insurance coverage: health, renters and auto. Life insurance is another type of policy to consider if you have financial dependents or own a business.

Your insurance needs change as you grow older. Owning a business, getting married, finding a new job and becoming a parent are all major life events that call for a fresh look at your insurance coverage.

First, evaluate any coverage you already have. Your employer may offer insurance benefits. If you're a financial dependent, you still may be covered by your parents' policies. Check with your insurance agent to learn more about these policies and to make sure the existing coverage is adequate.

If you must purchase insurance on your own, follow these money-saving tips:

1. If you can't get health insurance through your employer, purchase it through a group, such as an alumni association or trade organization.

2. Raise your deductibles. Each visit to the doctor or trip to the repair shop will cost more, but you'll save on the overall premium. Be careful not to raise deductibles higher than you can afford, however. If a $500 bill could wipe out your monthly budget, go lower. And in the meantime, build your financial reserves in a savings or money market account. One option is a Health Savings Account (HSA), which is designed to give you more control over your health coverage while also receiving tax breaks. To learn about PEFCU's HSA options, please call 800.627.3328 or 765.497.3328.

3. Call at least three insurance agents. You'll find quotes hundreds of dollars apart for the same coverage.

4. Choose your vehicle with insurance in mind. Some vehicles are far more expensive to insure than others. Check with your agent what the premium will be before you buy.

5. Buy only the coverage you need and don't get talked into unnecessary add-ons. For example, if your car is worth $1,000 or less, drop collision and comprehensive policies.

6. Take advantage of every discount you're entitled to, including those available for good students and safe drivers.