Hey Millennials! Here is Your Insurance Checklist

16 Nov

Recommended insurance coverages can vary and change as you age, start a family and acquire more assets. We thought it might be fun to take a look at what insurance millennials should be carrying. 

Millennials are defined as adults between the ages of 23 and 39 years old in 2020. Here is a quick rundown of the different insurance coverages millennials should be carrying:

Homeowners, renters or condo insurance

It doesn’t matter if you own a home or are renting, you should be carrying coverage on your living space. 

Homeowners insurance: If you own a home, you will need to carry homeowners insurance. If you have a mortgage on your home, your lender will require that you carry this type of policy. Homeowners insurance will step up to protect your home if it is damaged or destroyed by a covered peril such as fire, wind, hail or even vandalism. Your insurance agent or lender will help determine the proper amount of coverage for your specific house. 

In addition to protecting your home, homeowners insurance provides liability coverage in the event someone is injured in your home or on your property. This coverage steps in to cover medical bills and even the cost of a lawsuit if someone sues due to being injured at your home, slipping on ice for example. 

Homeowners also offers additional living expenses coverage which will help pay for living expenses if you are unable to live in your home due to damage from a covered peril. This coverage will pay hotel, restaurant and even dry-cleaning bills if you are unable to live in your damaged home. 

Homeowners insurance also covers your personal belongings inside your home. This includes everything from clothes and other personal items to electronics, furniture and any other personal belongings. 

There can be coverage caps on luxury items with most homeowner policies. The cap is usually around $1,500 and applies to items such as artwork, jewelry, furs, collectibles and even wine collections. Check with your insurer regarding coverage caps.

Finally, almost all standard homeowner policies exclude flood and earthquake damage. If you live in an area prone to flood or earthquakes you will need a separate policy to protect your home. Flood insurance can be purchased via the National Flood Insurance Program or in the private market. Earthquake coverage is often a rider to your homeowners policy or a separate earthquake policy. 

Tips for finding affordable homeowners insurance:

  • Shop Your Coverage: Insurers rate risk differently which can result in dramatic differences in premium quotes. Shop your coverage often and get quotes from at least five different insurers. Always make sure you are comparing apples to apples when it comes to coverage levels and deductibles. 
  • Up Your Deductible: The higher your deductible, the lower your premium. If your premium borders on unaffordable, consider upping your deductible. However, always choose a deductible that you can easily afford in the event you have to make a claim on your policy. 
  • Ask About Discounts: Insurers offer a variety of discounts and they can dramatically lower your premium. Ask your insurer to do a discount review to make sure all available discounts are being applied to your premium. 

Renters Insurance: If you are renting an apartment or house, you should absolutely be carrying renters insurance. Renters insurance if very affordable and will protect your personal belongings in your apartment as well as provide some liability coverage. 

The building owner will carry insurance that will repair or rebuild the building if it is damaged or destroyed. According to the Insurance Information Institute, the average renters insurance policy costs roughly $180 a year making this coverage extremely affordable. 

Renters coverage will pay to replace you belongs (up to your coverage limits) and also comes with liability coverage ($100,000 is fairly standard) as well as provide you with additional living expenses coverage.

Condo Insurance: Condo insurance is a bit different. It will pay out to repair your particular unit if it is damaged or destroyed by a covered peril. While the condo association will carry insurance to rebuild or repair the entire building, condo insurance deals with your particular unit. 

In most cases the association’s coverage stops after the exterior walls which means you are responsible for the interior walls, fixtures, appliances, and your personal property. A condo policy covers all of that as well as providing some liability protection. 

In almost all cases, both your lender and condo association will require you to carry a condo policy. Condo insurance tends to be fairly affordable. 

Car Insurance 

Car insurance is one of the most important types of insurance you can carry. It not only protects your ride but will step up to cover lawsuits (up to your coverage limits) if you are at fault in an accident. In addition, it is required by state law. 

Car insurance comes in a variety of coverage and what protections you carry will depending on your vehicle. Here is a quick overview of the various coverages:

  • Liability: This coverage is required in almost all states to be legal out on the road. It will cover medical bills for the other driver and passengers in their vehicle, as well as the cost of a lawsuit and any settlements or judgements if you are at fault in an accident. 

Liability comes in two different flavors, bodily injury and property damage. Bodily injury pays medical and lawsuit bills for anyone injured in an accident caused by you, it does not pay your medical bills (your health insurance will cover that) while Property Damage liability will pay to repair property that you damage with your vehicle. In most cases, this refers to the other person’s car in the accident but will also cover mailboxes, fences and other property you manage to damage. 

While liability coverage is required by the state, the state required minimums are often too low and will quickly be eaten up in a serious accident. Insurance experts recommend carrying 100/300/50 which breaks down to $100,000 per person in an accident, $300,000 per accident and $50,000 in property damage. 

  • Collision and Comprehensive: These coverages protect your vehicle. Collision will pay to repair or replace your vehicle if it is damaged or destroyed in an accident and comprehensive will pay to repair the vehicle if it is damage by something other than a collision. Examples of coverage include fire, wind, hail, flood, theft, vandalism, falling objects, and hitting an animal. These are not required coverages but if you would repair your vehicle if it was damaged you should carry this insurance. 

Life insurance

If you are a millennial and have a family, you should absolutely consider life insurance. This coverage can help protect your family if you pass away. 

Life insurance is cheaper when you are young which makes it a great time to purchase it for millennials. While there are many types of life insurance out there, term life insurance is usually the most affordable. 

Term insurance is a life insurance policy that provides coverage for a certain period of time or a specified “term” of years. As an example, the term of 30 years is a popular choice.  If the insured dies during the time period specified in the policy and the policy is active, or in force, a death benefit will be paid, once the term has passed, the policy expires. 

Pet insurance

According to the Insurance Information Institute roughly 67 percent of US households have a pet and we like to pamper them. The American Pet Products Association found that Americans spent more than $72 billion annually on our pets.

A serious issue with your pet can lead to serious vet bills. Pet insurance is fairly inexpensive way to ensure that you pet gets the vet care they need without breaking the bank. 

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