Let’s continue on this series of Adulting. BTW, I really hate that word. It sounds like being an adult is a verb, when actually it is reality and you’re always an adult now. It also sounds like a childish way to make excuses for not being a “full adult.” In any case, I still use the word like 8 times a week #hypocrite
Ok, moving on… Let’s talk Insurance.
No one teaches you about insurance. Literally no one. If you know anything about insurance it is because you have a family member in the industry, you’re in the industry, or you might be weird.
I’ve been thinking about insurance a lot lately, probably because that is my full time career to talk about insurance. Also I’ve been thinking about it because we are renewing our Auto Insurance today, we are arguing our apartment renewal which also requires renters insurance, and I have to re-elect our health insurance right now.
Insurance is there for your peace of mind. Any agent will tell you that. They aren’t wrong in that statement either. If you end up wrecking your brand new car, chances are your insurance carrier will step in and pay that thing off for you. If you lose your engagement ring, your insurance company could replace that for you, etc. The list goes on.
In most areas of your life, it is legally mandated that you carry insurance coverage. Health, Auto, Home/Renters, etc. There are optional lines like Life Insurance, Umbrella coverage (no, not for rain), etc. Long story short – make sure you have good insurance. If you follow anything about Dave Ramsey and his financial plans, one of his big concepts is having the right insurance coverage, and that is because when somethings goes wrong, your insurance company pays for it all at once, instead of you.
You’ll make payments each month or so, but they are smaller, and you generally get a lot more coverage than you realize. My parents and I were in a terrible accident when I was 5, I remember they didn’t have very great auto insurance and it didn’t help them when medical bills started to arise.
So – here are some basics, with some of my knowledge (being a licensed insurance agent, but on the Property and Casualty side), but mostly my opinions:
-Have some kind of Life Insurance on yourself. Whether you’re married or not, make sure there is a life insurance policy, even if it’s $15,000. If you’re married, it should be more. The last thing you want to happen when you die is for all your loved ones to have to figure out how to pay for your funeral expenses. Life insurance is pretty cheap when you’re young too.
-Please buy up on your auto insurance. Minimum limits exist per state regulation, but they won’t cover anything if you hurt people and their car by accident. Do some research on that.
-Have some kind of renter’s insurance. Even if your stuff is second-hand, you have a $30 stained couch, and your clothes are from H&M. You never know what could happen, but it would still be a lot of money to replace all those things at once, let alone your TV, computer, Ipad, bed, microwave….
-Get health insurance. Ok, Obamacare basically made you all have it, but read the dang policy. What are your deductibles, what are your co-pays, do you have an emergency fund to cover those if you’re sick? What if you trip and break a leg and they have to do X-rays? Seriously, you should understand your health insurance.
There are also some fancy insurance words carriers and agents will use to confuse you to:
Premium – This is a fancy word for the amount of money a policy costs
Additional premium – The extra money it costs to pay for whatever coverage you just added (New car, new house/rental, rings, etc)
Coverage – What you’re paying for, the amount of money they will pay if something goes wrong, etc
Deductible – The amount you have to pay the company before they will pay anything
Carrier – The company who covers you (think State Farm, Farmers, AAA, Progressive)
Agent/Broker – The person who represents you and places you with a Carrier. They might work with many different carriers, but should be able to explain everything to you. Find a good agent, and keep them around for all your new adulating needs.
This is some basic stuff, and I didn’t talk about limits or coverages, because publishing those things isn’t a good idea since the market always changes. Find someone who can really sit you down and explain things. Do some googling too, you can teach yourself a lot. It is really important to make sure you have the right Insurance for different aspects of your life. Things go wrong all the time and you never know what you’ll need.
