8 Insurance Tips for Young Adults Just Starting Out on Their Own

As a young adult starting out on your own Insurance , you may be thinking about buying a car or renting an apartment. You’ll have many other exciting expenses in the coming years as well, but before you take the plunge and sign a lease or finance a car purchase, it’s important to consider how insurance will affect your financial situation. Fortunately, getting cheap insurance is much easier than most people think.

In fact, if you’re under 25, getting affordable insurance as a young adult is almost guaranteed as long as you understand what factors can impact your premiums. Because so many people underestimate the importance of having the right type of insurance at this age, we’ve compiled some great advice to help you get started on the right foot:

Auto Insurance for Young Adults


If you own a car, you’ll need auto insurance. However, auto insurance rates are determined by your driving record, location, and other factors. If you’re under 25, your rates will probably be higher than rates for older drivers. But there are several things you can do to bring down these rates and make your insurance more affordable.

If you’re a full-time student (or if you’re going to school part-time), you may be able to qualify for a discount on your auto insurance. For example, many insurance companies offer a discount for good students, or those students who maintain a B average or above. You can also ask your parents to add you to their insurance policies, which will make your rates lower by extending your coverage to include their cars as well. There may also be a reduced-cost program for young drivers available in your area.

Homeowner’s Insurance for Young Adults

If you’re thinking about buying a house, it’s a great idea to get homeowner’s insurance. It protects your property in the event of a fire, theft, or other unforeseen circumstances. Homeowner’s insurance is particularly important if you’re a first-time homeowner, because, as a young adult, you may not have enough savings to cover the cost of rebuilding your home if it is destroyed by a natural disaster. Dr. Carole Philbin, a professor of risk management at the University of Wisconsin-Milwaukee, recommends that first-time homebuyers get a high-risk home insurance policy. While this will be more expensive than a standard policy, the increased coverage and safety precautions are likely to be worth the extra cost. Dr. Philbin also recommends that young adults who are buying a home take out enough insurance to rebuild the home and have a little extra on top of that in case something unexpected happens or the cost of building materials goes up.


Health Insurance for Young Adults

Health insurance is another important factor for young adults to consider. While most health insurance plans require you to be 25 or older to stay on your parents’ plan, there are a few exceptions. If you are attending or have graduated from college, you may be able to stay on your parents’ health plan while you figure out your next steps. Dr. Philbin also recommends that young adults stay on their parents’ health insurance until they get to a point in their careers when they can afford to buy their own health insurance. While premiums are likely to be expensive, they will most likely be much lower than what you would pay if you bought a health insurance policy on your own.

The Bottom Line: Start as You Mean to Go Forward

As a young adult, it’s important to get your financial footing on the right path. Insurance is an important part of keeping yourself protected financially. It’s not uncommon for young adults to put off buying insurance, but this is a bad idea. If you’re able to get your insurance early, it will be much cheaper than if you wait. Additionally, if you get health insurance before you need it, you will be covered immediately and won’t have to worry about waiting until you are able to buy a policy.

You can also refet to The Most Importance of Buying Insurance

Final Words: Wrapping Up

As a young adult, you may not think that insurance is important, but it actually protects you in a number of ways. Auto insurance will protect you if you’re in an accident and someone sues you for medical bills, homeowner’s insurance will protect you if your house is destroyed by a natural disaster, and health insurance will keep you covered in the event of an accident or illness. If you still feel like you don’t need insurance, remember that it also gives you peace of mind in case of an emergency. In fact, it’s likely that you’ll need insurance at some point in your life, so it’s better to get it before you need it than to be forced to pay more when you have to purchase it at an older age.