The
Steps: |
|
Insurance
Section
I / Section
II / Section
III / Section
IV
Protection Against Risks - Insurance contributes to your economic security and independence because events happen that are outside your control as explained by the random walk theory. Insurance and self-management can reduce negative effects of risks. Insurance coverage that is important for college students includes:
- Insurance coverage for personal possessions taken to college if they are worth more than cost of premiums
- Health insurance; stop-gap insurance to cover time between college and employment
- Auto insurance if you own a car
- Disability income insurance
- Credibility insurance
As the deductible (part you pay first) increases, the premium decreases. Take the highest deduction you can afford when purchasing coverage. Therefore, calculate costs of premiums against deductibles you can absorb to determine on the average what would be financially advantageous. Some prospects are based on your history and statistics.
Buy insurance only to protect yourself against losses that would be financially catastrophic. Shop around – don't assume all insurance companies charge the same. Insurance rates vary widely and some insurance can be purchased directly from a company bypassing an agent and commissions.
As a college undergraduate your possessions may be covered under your parents' homeowner's insurance policy. You need a rider for expensive collections, computer equipment, jewelry, stereo equipment in house or car, or other items of high value. Check first with your parents through their homeowners or renters insurance coverage. All insurance companies in each state determine their own guidelines on how they offer insurance coverage.
A standard homeowner's policy usually covers personal property away from the home up to an amount equal to 10 percent of the amount specified in the policy or $1000. If property is stolen from a car, you must show proof of forced entry into the car, unless you have the extended theft endorsement. Loose items such as CDs may not be covered.
When you have graduated or are living independently, you will need to purchase a renter's contents coverage policy. A renters policy, referred to also as HO-4, protects the contents of a dwelling from losses caused by specified perils stated in the policy. The insurance is relatively inexpensive, and it also provides for liability coverage.
When purchasing renters insurance, take an inventory of your possessions and assign a value to each item. When totaled, these values should be your guide to selecting the proper coverage. You will need to evaluate the policy for liability losses. Is it sufficient to provide the level of liability protection you want? Currently, personal liability coverage on a renters policy is at $100,000 and medical payments to others is covered at $1000 per person. Select coverage for the replacement cost of your property rather than fair market value.
Take photos or video of valuable property and keep them in a safe deposit box or give them to your insurance agent. Personal property valued in excess of coverage or limitations offered by the renters policy need an increase in the amount of coverage or a "special endorsement" to cover certain items. It is advisable to get an "inflation-guard" endorsement that takes into consideration rising replacement values.
|
Family
- Government &
Community - Education
& Skills - Employment
- Management
- Credit
- Housing,
Vehicles & Equipment - Insurance
- Savings
- Investment
- Financial
Planning
Ability
to Adjust
About
This Book - About
The Author - Purchasing
Information - Associated
Links
Contributors
