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Guide to insurance for college students: How to ace your coverage 101

By Posted : September 24, 2019

College studentsThe dorm rooms and newly rented apartments are tricked out, the highlighters are uncapped, classes have begun and a new year of higher education is underway. Yet one part of the back-to-school checklist that many parents and students might have overlooked is how to ensure that college kids have the best insurance coverage -- ideally at the most affordable price.

Insurance.com’s experts created this guide to help college students – and their parents – make smart insurance choices.

Insurance.com's survey of people 18 to 25 found that 19% said they have a poor level of knowledge about insurance. Nearly half said they have a “good” idea about how insurance works. A bit over one-third said their insurance acumen is excellent. However, when asked about basic components of auto, renters, life and health insurance cover, many failed to answer correctly.

But there’s hope.  When asked what they would give up rather than educate themselves about insurance, 38% said they wouldn’t sacrifice anything because they want to learn more about insurance. Others, not so much -- here is what they said they’d give up rather than be schooled in insurance basics:

I'd rather do this than learn about insurance%
Give up pizza or burritos/fast food for a month22%
Cancel my streaming service (Netflix, Hulu, Amazon etc.) for a month16%
Have my favorite sports team lose a big game16%
Not see any live music for a month15%
Cancel my streaming music service (Spotify, Pandora etc.) for a month13%
Cancel my unlimited data plan for a month12%
Not use social media for a month9%
Fail a test or exam5%

Learning about insurance isn't as tasty as pizza or a burrito. It's not as much fun as binge watching your favorite show. But it is an important piece of your finances, protecting your possessions and your health. Here are the sections of our college guide for insurance. Click on any of them to get to the sections or scroll down the page. 

College women with insurance policy clipboardCar insurance for college students

Expert advice: Five car insurance tips for college students

How to save and get the best cheap car insurance for college students

Renters insurance for college students

Expert advice: Five renters insurance tips for college students

Buying renters insurance: How much you can expect to pay, how much you can save

Health insurance for college students

Expert advice: Five health insurance tips for college students

Buying a health insurance plan: How much you can expect to pay

Life insurance for college students

Expert advice: Five life insurance tips for college students

Buying a life insurance policy: How much you can expect to pay

Lifelong learners: Graduating to smart insurance moves in the future

 

Car insurance for college students

Most college students are clueless about which types of car insurance come into play for common situations, such as accidents or damage from stormy weather, according to our survey.

This is concerning because 42% of those surveyed said they selected coverage and bought a policy on their own without their parents’ help. Online purchases were the most popular method. Here’s how respondents bought a policy:

How policy was purchased%
Bought it online – on computer39%
Spoke to an agent on the phone36%
Went into an insurance agency20%
Bought it online – using mobile device6%

Liability insurance

Liability coverage is the core of any auto insurance policy. Liability insurance is required to drive legally in nearly all states. It pays for damage to other vehicles and property you cause in an accident, up to the amount you choose, known as limits. It also pays for others’ medical expenses injured in an accident you cause. It doesn’t cover damage to your own car.  Yet, over one-third thought it covered all mishaps for your own vehicle. The following percentages mistakenly thought their liability covered these situations: (Respondents could choose more than one answer.)

Incorrect liability answers%
All incidents with my vehicle34%
Injuries to passengers in my car25%
Damage to my car in a crash.23%
Damage to my car if an object falls on it, such as a tree20%
Damage to my car from a flood, hail or other severe weather20%
Damage to my car if I hit an animal, such as a deer16%
Theft of my car11%

Results weren’t much better when asked how insurers interpret and distribute liability insurance. When asked what liability coverage of 25/50/40 means, 62% failed to choose the correct answer --$25,000 for bodily injury to one person in an accident, $50,000 for bodily injury per accident and $40,000 for property damage.

Comprehensive insurance

Comprehensive and collision insurance are optional coverages, often sold together. Comprehensive pays up to your car’s actual cash value for damage from fire, flooding, hail, animal collisions, falling objects and vandalism, minus your deductible. Comprehensive also pays out if your car is stolen. Many college students surveyed didn’t know what comprehensive insurance covers and incorrectly said it covers the following: 

Incorrect comprehensive answers%
All incidents with my vehicle56%
Damage to my car in a crash44%
Property damage to other’s property if I cause a crash27%
Injuries to others outside my car if I cause a crash23%
Injuries to passengers in my car20%

Collision coverage

Knowledge of collision coverage was also lacking. Collision, also optional, covers damage to your car in an accident, regardless of fault. The following percentages got that wrong, saying it covers these instances:

Incorrect collision answers%
All incidents with my vehicle39%
Damage to my car if an object falls on it, such as a tree28%
Property damage to other’s property if I cause a crash27%
Damage to my car if I hit an animal, such as a deer26%
Injuries to others outside my car if I cause a crash22%
Damage to my car from a flood, hail or other severe weather20%
Injuries to passengers in my car14%
Theft of my car5%

 

Expert advice: Five car insurance tips for college students

Know your coverages.  You’re away from home and if in an accident, you need to know what to do and how insurance works. As noted above, if you’re at-fault for an auto accident, the people you harm will claim against your liability coverages. This is why having higher than minimum coverage, if possible, is wise. Medical expenses and car repairs aren’t cheap and low limits could be exceeded leaving you personally responsible. If you damage your own car, you can make a claim for the damages with your insurer only if you have collision and comprehensive. You should also know if you have medical coverage for you on your auto policy. If not, you’ll have to use your health insurance if injured in an at-fault accident. Insurance terms can be confusing, understanding your policy before a claim is vital.

Notify your insurer about your change of address. If you go to an out-of-state college and take your car or your parents’ car with you, you must make sure you meet all the minimum car insurance requirements of the state you live in during the school year. If your home-state car insurance company doesn’t do business in the state where you go to school, you may have to buy a new policy. If it does and you can keep your policy, check to be sure your policy limits will be adjusted to meet state requirements. And be prepared – your rates may go up or down, depending on your new location, as where you live is factored into your cost. Failing to notify your insurer of a move can nullify your coverage, which means it won’t pay out if you get in an accident. If you take your car or your parents’ car to a school in your home state, you still need to notify your insurance company of your new address.

Stay on your parents’ policy, even if you don’t drive much. If you own a car and your name is on the title, you must insure it with your own policy. But otherwise, staying on your parents’ policy is the smart move. It will typically cost less than if you have your own policy.  Even if you don’t have a car, being listed on the family policy means, you still have liability coverage if you occasionally drive a friend’s car (as secondary coverage to friend’s primary coverage) or drive a rental, and you’ll be covered when you drive your parents’ cars when you go home.

three young people in carIn general, you can remain on your parents’ policy as long as you’re a full-time student and your home is your primary residence, no matter where you go to college. Additionally, if listed on your parents’ policy, and they have personal injury protection coverage (PIP) or uninsured/underinsured motorist coverage (UI/UIM), you would be covered as a passenger or pedestrian. Both provide protection if you’re hurt in a car accident as a passenger in a vehicle or if hit by a car while biking or as a pedestrian.

Finally, rates go down the longer you’re insured, so staying on your parents’ policy -- even if you rarely drive -- will pay off in the end.

Get listed as a driver on the cheapest household car. If you’re on your parents’ policy and your household has several cars, it can save money to have you assigned to a specific vehicle -- the one that's cheapest to insure. Check your policy and double-check this with your insurer, as some companies will automatically assign young drivers to the most expensive vehicle unless you tell them otherwise.

Compare rates to save, snag discounts. The most effective way to save money on auto insurance is to compare car insurance companies. Rates differ dramatically for the exact same policy, depending on the insurance company. That’s because each uses its own formula to assess risk and price policies. We found that a driver age 20 buying  a policy with liability limits of 50/100/50 with a $500 deductible on comprehensive and collision  could save up to $2,876 by comparing quotes.

Another way to save is by getting discounts. If you are listed on your parents’ policy, you may qualify for a “student away” or “good student” discount. Insurance.com rate data show that a “Student Away” discount can net a savings of 14%, on average, if you’re listed on your parents’ policy and drive one of their cars they keep at home but attend college more than 100 miles away.  A good student discount trims 7% on average, about $360 a year, from your parents’ coverage costs if you maintain a “B” average or better. But some companies, such as State Farm, may cut up to 25% off the price for good students.

Also, check with insurance companies to see if your school affiliation, honor society, sororities or fraternity will get you a discount.

How to save and get the best cheap car insurance for college students

The best way to save money on car insurance is to shop around and find the lowest rate. No two insurance companies will have identical prices for the same policy, and the difference in cost varies significantly among carriers. If you don’t compare rates, you won’t know which is the most affordable.

Insurance.com’s rate analysis shows that the national average cost for the following driver profile:

  • $3,125 yearly or $260 a month – Auto insurance of 50/100/50 liability limits with comp and collision ($500 deductible) for drivers age 20.
  • $2,509 yearly or $209 per month for drivers age 21, and for age 22 it’s $2,243 or $107 a month

Further research reveals that you can save $2,800, on average, by comparison shopping for auto coverage. The savings is the difference between the highest and lowest rates fielded from up to eight companies in 10 ZIP codes in each state for the above profiles.

StateCompanyAverage rateSavings
AlaskaUSAA$1,802$2,267
AlaskaState Farm Mut Auto Ins Co$1,952
AlaskaGeico Gen Ins Co$2,120
AlaskaAllstate Fire & Cas Ins Co$3,118
AlaskaProgressive Direct Ins Co$3,707
AlaskaAllstate Prop & Cas Ins Co$3,874
AlaskaProgressive Specialty Ins Co$4,069
AlabamaGeico Cas Co$1,786$4,273
AlabamaGeico Gen Ins Co$2,164
AlabamaAllstate Prop & Cas Ins Co$2,409
AlabamaState Farm Mut Auto Ins Co$3,487
AlabamaProgressive Specialty Ins Co$3,695
AlabamaNationwide Mut Fire Ins Co$3,972
AlabamaAlfa Mut Ins Co$4,781
AlabamaMid Century Ins Co$6,113
ArkansasSouthern Farm Bureau Cas Ins Co$2,066$2,872
ArkansasGeico Gen Ins Co$2,240
ArkansasState Farm Mut Auto Ins Co$2,635
ArkansasShelter Mut Ins Co$3,160
ArkansasFarmers Ins Co Inc$3,420
ArkansasAllstate Prop & Cas Ins Co$3,814
ArkansasNationwide Mut Ins Co$4,736
ArkansasProgressive Northwestern Ins Co$4,938
ArizonaGeico Cas Co$1,357$3,089
ArizonaGeico Gen Ins Co$2,030
ArizonaAmerican Family Mut Ins Co$2,730
ArizonaProgressive Advanced Ins Co$2,824
ArizonaState Farm Mut Auto Ins Co$2,983
ArizonaAllstate Fire & Cas Ins Co$3,382
ArizonaFarmers Ins Co Of AZ$4,116
ArizonaNationwide Ins Co Of Amer$4,446
CaliforniaGeico Gen Ins Co$2,291$3,938
CaliforniaUnited Financial Cas Co$3,532
CaliforniaAllstate Northbrook Ind Co$3,769
CaliforniaState Farm Mut Auto Ins Co$4,022
CaliforniaAmco Ins Co$4,029
CaliforniaCSAA Ins Exch$4,373
CaliforniaInterins Exch Of The Automobile Club$4,586
CaliforniaFarmers Ins Exch$4,864
CaliforniaMercury Ins Co$6,229
ColoradoGeico Cas Co$1,894$2,570
ColoradoState Farm Mut Auto Ins Co$2,421
ColoradoGeico Gen Ins Co$2,825
ColoradoAmerican Family Mut Ins Co$3,080
ColoradoProgressive Direct Ins Co$3,323
ColoradoAllstate Fire & Cas Ins Co$4,230
ColoradoAmco Ins Co$4,252
ColoradoFarmers Ins Exch$4,464
ConnecticutGeico Gen Ins Co$1,800$3,816
ConnecticutGeico Ind Co$2,970
ConnecticutState Farm Mut Auto Ins Co$3,108
ConnecticutNationwide Mut Ins Co$4,364
ConnecticutAllstate Fire & Cas Ins Co$4,587
ConnecticutSafeco Ins Co Of IL$4,814
ConnecticutProgressive Cas Ins Co$4,825
ConnecticutForemost Ins Co Grand Rapids MI$5,616
DCUSAA Cas Ins Co$1,588$3,466
DCGeico Gen Ins Co$1,957
DCGovernment Employees Ins Co$1,957
DCState Farm Mut Auto Ins Co$3,492
DCProgressive Direct Ins Co$3,762
DCNationwide Ins Co Of Amer$4,573
DCAllstate Prop & Cas Ins Co$5,054
DelawareGEICO Advantage Ins Co$1,645$4,044
DelawareGeico Gen Ins Co$2,256
DelawareProgressive Direct Ins Co$3,503
DelawareState Farm Mut Auto Ins Co$3,644
DelawareAllstate Prop & Cas Ins Co$4,739
DelawareNationwide Mut Ins Co$5,689
FloridaGeico Gen Ins Co$2,360$3,271
FloridaState Farm Mut Auto Ins Co$3,657
Florida21st Century Centennial Ins Co$3,732
FloridaAllied Prop & Cas Ins Co$4,610
FloridaAllstate Fire & Cas Ins Co$4,738
FloridaGeico Ind Co$5,128
FloridaProgressive Select Ins Co$5,632
GeorgiaGeico Gen Ins Co$1,524$5,199
GeorgiaUSAA$2,284
GeorgiaState Farm Mut Auto Ins Co$2,890
GeorgiaGeorgia Farm Bureau Mut Ins Co$2,954
GeorgiaAllstate Prop & Cas Ins Co$3,462
GeorgiaAllstate Fire & Cas Ins Co$3,823
GeorgiaProgressive Premier Ins Co Of IL$3,836
GeorgiaProgressive Mountain Ins Co$4,761
GeorgiaNationwide Mut Ins Co$6,723
HawaiiGeico Ind Co$833$1,292
HawaiiGovernment Employees Ins Co$870
HawaiiUSAA$878
HawaiiState Farm Mut Auto Ins Co$912
HawaiiAllstate Ins Co$1,240
HawaiiProgressive Direct Ins Co$1,348
HawaiiLiberty Mut Fire Ins Co$1,578
HawaiiFarmers Ins HI Inc$2,125
IowaGeico Cas Co$1,420$1,794
IowaGeico Gen Ins Co$1,668
IowaState Farm Mut Auto Ins Co$1,976
IowaFarm Bureau Prop & Cas Ins Co$1,986
IowaFarmers Ins Co Inc$2,121
IowaAmerican Family Mut Ins Co$2,359
IowaAllstate Fire & Cas Ins Co$2,372
IowaProgressive Universal Ins Co$2,619
IowaNationwide Agribusiness Ins Co$2,748
IowaProgressive Northern Ins Co$3,214
IdahoGeico Gen Ins Co$1,522$1,864
IdahoProgressive Northwestern Ins Co$1,773
IdahoState Farm Mut Auto Ins Co$1,874
IdahoSafeco Ins Co Of IL$2,025
IdahoFarmers Ins Co Of ID$2,399
IdahoAllstate Fire & Cas Ins Co$3,000
IdahoDepositors Ins Co$3,055
IdahoFarm Bureau Mut Ins Co Of ID$3,386
IllinoisCountry Pref Ins Co$1,463$2,428
IllinoisGeico Gen Ins Co$1,798
IllinoisGeico Cas Co$2,034
IllinoisState Farm Mut Auto Ins Co$2,492
IllinoisAmerican Family Mut Ins Co$3,006
IllinoisProgressive Northern Ins Co$3,021
IllinoisAllstate Fire & Cas Ins Co$3,713
IllinoisIllinois Farmers Ins Co$3,891
IndianaErie Ins Exch$1,399$2,923
IndianaGeico Cas Co$1,622
IndianaNationwide Mut Ins Co$2,106
IndianaIllinois Farmers Ins Co$2,148
IndianaProgressive Paloverde Ins Co$2,399
IndianaState Farm Mut Auto Ins Co$2,603
IndianaProgressive Southeastern Ins Co$2,680
IndianaAmerican Family Mut Ins Co$2,701
IndianaAllstate Prop & Cas Ins Co$3,102
IndianaUnited Farm Family Mut Ins Co$4,322
KansasGeico Gen Ins Co$1,888$1,744
KansasAmerican Family Mut Ins Co$2,360
KansasState Farm Mut Auto Ins Co$2,567
KansasFarm Bureau Prop & Cas Ins Co$2,818
KansasNationwide Affinity Co of Amer$2,929
KansasAllstate Fire & Cas Ins Co$3,321
KansasFarmers Ins Co Inc$3,416
KansasProgressive Northwestern Ins Co$3,632
KentuckyGeico Gen Ins Co$1,849$3,278
KentuckyState Farm Mut Auto Ins Co$2,893
KentuckyProgressive Direct Ins Co$3,368
KentuckyAllstate Prop & Cas Ins Co$3,706
KentuckySafeco Ins Co Of IL$3,737
KentuckyKentucky Farm Bur Mut Ins Co$3,811
KentuckyProgressive Cas Ins Co$4,907
KentuckyNationwide Prop & Cas Ins Co$5,127
LouisianaGeico Cas Co$3,134$3,088
LouisianaState Farm Mut Auto Ins Co$4,513
LouisianaAllstate Prop & Cas Ins Co$4,554
LouisianaLouisiana Farm Bureau Cas Ins Co$4,697
LouisianaProgressive Security Ins Co$6,222
MassachusettsState Farm Mut Auto Ins Co$1,522$4,083
MassachusettsPlymouth Rock Assur Corp$1,759
MassachusettsGeico Gen Ins Co$1,866
MassachusettsCommerce Ins Co$2,296
MassachusettsArbella Mut Ins Co$3,264
MassachusettsSafety Ins Co$3,540
MassachusettsAllstate Ins Co$4,729
MassachusettsLiberty Mut Ins Co$4,803
MassachusettsProgressive Direct Ins Co$5,605
MarylandGeico Gen Ins Co$1,909$4,442
MarylandErie Ins Exch$2,017
MarylandGeico Cas Co$2,778
MarylandState Farm Mut Auto Ins Co$3,005
MarylandNationwide Affinity Co of Amer$3,051
MarylandAllstate Ind Co$3,734
MarylandProgressive Select Ins Co$4,714
MarylandNationwide Mut Ins Co$6,351
MaineGeico Gen Ins Co$986$1,821
MaineConcord Gen Mut Ins Co$1,020
MaineState Farm Mut Auto Ins Co$1,983
MaineUnited Financial Cas Co$2,243
MaineProgressive Northwestern Ins Co$2,645
MaineAllstate Fire & Cas Ins Co$2,807
MichiganGeico Ind Co$2,143$6,441
MichiganProgressive Marathon Ins Co$3,651
MichiganHome Owners Ins Co$3,868
MichiganMemberselect Ins Co$4,612
MichiganState Farm Mut Auto Ins Co$7,053
MichiganAllstate Fire & Cas Ins Co$7,422
MichiganFarmers Ins Exch$8,554
MinnesotaGeico Gen Ins Co$1,885$1,839
MinnesotaState Farm Mut Auto Ins Co$1,985
MinnesotaOwners Ins Co$2,222
MinnesotaAmerican Family Mut Ins Co$2,283
MinnesotaIllinois Farmers Ins Co$2,302
MinnesotaProgressive Preferred Ins Co$3,196
MinnesotaAllstate Ind Co$3,389
MinnesotaAllied Prop & Cas Ins Co$3,724
MissouriGeico Cas Co$1,723$1,923
MissouriGeico Gen Ins Co$1,952
MissouriAmerican Family Mut Ins Co$2,466
MissouriState Farm Mut Auto Ins Co$2,624
MissouriAllied Prop & Cas Ins Co$2,759
MissouriSafeco Ins Co Of IL$2,813
MissouriAllstate Fire & Cas Ins Co$2,862
MissouriAutomobile Club Interins Exch$3,036
MissouriProgressive Cas Ins Co$3,185
MissouriFarmers Ins Co Inc$3,354
MissouriShelter Mut Ins Co$3,646
MississippiGeico Gen Ins Co$1,793$2,243
MississippiMississippi Farm Bureau Cas Ins Co$2,144
MississippiNationwide Prop & Cas Ins Co$2,318
MississippiState Farm Mut Auto Ins Co$2,624
MississippiSafeco Ins Co Of IL$2,880
MississippiProgressive Gulf Ins Co$3,561
MississippiAllstate Prop & Cas Ins Co$4,036
MontanaSafeco Ins Co Of IL$1,578$3,123
MontanaGeico Gen Ins Co$1,738
MontanaState Farm Mut Auto Ins Co$2,321
MontanaNational Farmers Union Prop & Cas$2,385
MontanaAllstate Fire & Cas Ins Co$3,520
MontanaMid Century Ins Co$3,592
MontanaDepositors Ins Co$3,974
MontanaProgressive Northwestern Ins Co$4,701
North CarolinaGovernment Employees Ins Co$928$684
North CarolinaNorth Carolina Farm Bur Mut Ins Co$993
North CarolinaProgressive Southeastern Ins Co$1,180
North CarolinaIntegon Natl Ins Co$1,188
North CarolinaNationwide Mut Ins Co$1,313
North CarolinaState Farm Mut Auto Ins Co$1,329
North CarolinaAllstate Prop & Cas Ins Co$1,393
North CarolinaNationwide Ins Co Of Amer$1,612
North DakotaNodak Mut Ins Co$1,254$2,002
North DakotaGeico Gen Ins Co$1,948
North DakotaState Farm Mut Auto Ins Co$2,241
North DakotaMid Century Ins Co$2,386
North DakotaAllied Prop & Cas Ins Co$2,625
North DakotaAmerican Family Mut Ins Co$2,799
North DakotaProgressive Northwestern Ins Co$3,185
North DakotaAllstate Ins Co$3,256
NebraskaFarmers Mut Ins Co Of NE$1,811$1,517
NebraskaGeico Gen Ins Co$1,999
NebraskaState Farm Mut Auto Ins Co$2,121
NebraskaAmerican Family Mut Ins Co$2,223
NebraskaAllstate Fire & Cas Ins Co$2,484
NebraskaAllied Prop & Cas Ins Co$2,559
NebraskaFarm Bureau Prop & Cas Ins Co$2,828
NebraskaProgressive Northern Ins Co$2,935
NebraskaMid Century Ins Co$3,328
New HampshireGeico Gen Ins Co$958$3,621
New HampshireState Farm Mut Auto Ins Co$2,045
New HampshireProgressive Universal Ins Co$2,420
New HampshireNationwide Mut Ins Co$2,429
New HampshireAmica Mut Ins Co$2,466
New HampshireAllstate Fire & Cas Ins Co$2,677
New HampshireProgressive Northern Ins Co$4,579
New Jersey21st Century Centennial Ins Co$1,831$2,603
New JerseyGovernment Employees Ins Co$2,025
New JerseyNew Jersey Manufacturers Ins Co$2,329
New JerseyProgressive Garden State Ins Co$3,289
New JerseyAllstate NJ Prop & Cas Ins Co$3,532
New JerseyGeico Ind Co$3,776
New JerseyState Farm Ind Co$4,434
New MexicoGeico Gen Ins Co$1,494$2,545
New MexicoState Farm Mut Auto Ins Co$2,130
New MexicoProgressive Direct Ins Co$2,809
New MexicoAmco Ins Co$2,919
New MexicoProgressive Northern Ins Co$3,510
New MexicoFarmers Ins Co Of AZ$3,556
New MexicoAllstate Fire & Cas Ins Co$4,039
NevadaGeico Cas Co$1,943$2,740
NevadaState Farm Mut Auto Ins Co$2,886
NevadaMid Century Ins Co$3,197
NevadaAllstate Fire & Cas Ins Co$3,407
NevadaProgressive Northern Ins Co$3,973
NevadaVictoria Fire & Cas Co$4,290
NevadaWestern United Ins Co$4,683
New YorkGeico Gen Ins Co$1,198$3,280
New YorkProgressive Cas Ins Co$2,532
New YorkAllstate Fire & Cas Ins Co$2,900
New YorkState Farm Mut Auto Ins Co$3,265
New YorkGeico Ind Co$3,417
New YorkForemost Ins Co Grand Rapids MI$4,478
New YorkLiberty Mut Fire Ins Co$4,478
OhioGeico Cas Co$1,208$1,832
OhioErie Ins Co$1,449
OhioGeico Gen Ins Co$1,897
OhioProgressive Direct Ins Co$2,150
OhioState Farm Mut Auto Ins Co$2,186
OhioAllstate Fire & Cas Ins Co$2,389
OhioFarmers Ins Of Columbus Inc$2,550
OhioProgressive Specialty Ins Co$2,923
OhioNationwide Mut Ins Co$3,040
OklahomaGeico Cas Co$2,151$2,829
OklahomaGeico Gen Ins Co$2,410
OklahomaState Farm Mut Auto Ins Co$2,612
OklahomaAllstate Fire & Cas Ins Co$2,965
OklahomaFarmers Ins Co Inc$3,515
OklahomaOklahoma Farm Bureau Mut Ins Co$4,057
OklahomaProgressive Northern Ins Co$4,980
OregonGeico Cas Co$2,045$2,041
OregonGeico Gen Ins Co$2,176
OregonState Farm Mut Auto Ins Co$2,609
OregonProgressive Universal Ins Co$2,826
OregonFarmers Ins Co Of OR$3,227
OregonAllstate Fire & Cas Ins Co$3,371
OregonSafeco Ins Co of OR$3,763
OregonNationwide Ins Co Of Amer$4,086
PennsylvaniaGeico Cas Co$1,505$3,745
PennsylvaniaErie Ins Exch$1,993
PennsylvaniaGeico Gen Ins Co$2,039
PennsylvaniaState Farm Mut Auto Ins Co$2,515
PennsylvaniaNationwide Prop & Cas Ins Co$2,546
PennsylvaniaProgressive Advanced Ins Co$2,687
PennsylvaniaNationwide Mut Ins Co$3,182
PennsylvaniaAllstate Fire & Cas Ins Co$3,717
PennsylvaniaProgressive Specialty Ins Co$5,250
Rhode IslandGeico Gen Ins Co$2,286$3,760
Rhode IslandState Farm Mut Auto Ins Co$2,380
Rhode IslandAmica Mut Ins Co$3,976
Rhode IslandNationwide Mut Ins Co$4,135
Rhode IslandProgressive Direct Ins Co$4,145
Rhode IslandAllstate Fire & Cas Ins Co$4,259
Rhode IslandProgressive Cas Ins Co$6,046
South CarolinaGovernment Employees Ins Co$1,625$4,760
South CarolinaUSAA$1,749
South CarolinaAllstate Fire & Cas Ins Co$2,640
South CarolinaState Farm Mut Auto Ins Co$2,884
South CarolinaNationwide Mut Fire Ins Co$2,928
South CarolinaProgressive Northern Ins Co$3,552
South CarolinaNationwide Ins Co Of Amer$3,724
South CarolinaGeico Ind Co$6,385
South DakotaGeico Gen Ins Co$1,704$1,858
South DakotaFarmers Mut Ins Co Of NE$1,822
South DakotaState Farm Mut Auto Ins Co$2,185
South DakotaMid Century Ins Co$2,510
South DakotaAmco Ins Co$2,912
South DakotaAmerican Family Mut Ins Co$3,006
South DakotaAllstate Ins Co$3,204
South DakotaProgressive Northern Ins Co$3,562
TennesseeGeico Gen Ins Co$1,561$3,043
TennesseeErie Ins Exch$1,940
TennesseeTennessee Farmers Mut Ins Co$2,239
TennesseeMid Century Ins Co$2,358
TennesseeState Farm Mut Auto Ins Co$2,487
TennesseeSafeco Ins Co Of IL$2,622
TennesseeMountain Laurel Assur Co$2,709
TennesseeAllstate Prop & Cas Ins Co$3,267
TennesseeProgressive HI Ins Corp$3,458
TennesseeNationwide Mut Ins Co$4,604
TexasGEICO County Mutual Ins Co$1,788$2,420
TexasState Farm Mut Auto Ins Co$2,602
TexasProgressive Cnty Mut Ins Co$4,014
TexasAllstate Fire & Cas Ins Co$4,192
TexasColonial Cnty Mut Ins Co$4,208
UtahBear River Mut Ins Co$1,387$2,339
UtahGeico Cas Co$1,488
UtahGeico Gen Ins Co$1,684
UtahAllstate Fire & Cas Ins Co$2,286
UtahMid Century Ins Co$3,340
UtahAllied Prop & Cas Ins Co$3,435
UtahState Farm Mut Auto Ins Co$3,591
UtahProgressive Classic Ins Co$3,726
VirginiaUSAA$1,324$2,592
VirginiaUSAA Cas Ins Co$1,485
VirginiaNationwide Prop & Cas Ins Co$1,734
VirginiaGeico Gen Ins Co$2,042
VirginiaState Farm Mut Auto Ins Co$2,073
VirginiaProgressive Gulf Ins Co$2,644
VirginiaAllstate Prop & Cas Ins Co$2,710
VirginiaNationwide Mut Ins Co$3,916
VermontGeico Gen Ins Co$1,106$2,086
VermontConcord Gen Mut Ins Co$1,198
VermontGeneral Ins Co Of Amer$1,747
VermontGeico Ind Co$1,910
VermontNationwide Mut Ins Co$2,429
VermontState Farm Mut Auto Ins Co$2,487
VermontVermont Mut Ins Co$2,491
VermontProgressive Direct Ins Co$2,662
VermontProgressive Northern Ins Co$3,191
VermontAllstate Fire & Cas Ins Co$3,192
WashingtonPemco Mut Ins Co$1,765$1,068
WashingtonFirst Natl Ins Co Of Amer$2,155
WashingtonGeico Gen Ins Co$2,246
WashingtonState Farm Mut Auto Ins Co$2,498
WashingtonNationwide Ins Co Of Amer$2,696
WashingtonAllstate Fire & Cas Ins Co$2,705
WashingtonFarmers Ins Co Of WA$2,748
WashingtonProgressive Direct Ins Co$2,833
WisconsinGeico Cas Co$1,037$4,147
WisconsinGeico Gen Ins Co$1,536
WisconsinAmerican Family Mut Ins Co$1,657
WisconsinState Farm Mut Auto Ins Co$1,753
WisconsinProgressive Universal Ins Co$1,860
WisconsinAllstate Prop & Cas Ins Co$2,334
WisconsinArtisan & Truckers Cas Co$2,585
WisconsinMid Century Ins Co$2,903
WisconsinAcuity A Mut Ins Co$3,026
WisconsinAmco Ins Co$5,211
West VirginiaErie Ins Prop & Cas Co$1,932$4,119
West VirginiaState Farm Mut Auto Ins Co$2,096
West VirginiaGeico Gen Ins Co$2,157
West VirginiaNationwide Ins Co Of Amer$2,725
West VirginiaNationwide Mut Ins Co$3,290
West VirginiaAllstate Prop & Cas Ins Co$3,526
West VirginiaProgressive Max Ins Co$6,051
WyomingSafeco Ins Co Of IL$1,489$1,894
WyomingState Farm Mut Auto Ins Co$2,362
WyomingGeico Gen Ins Co$2,671
WyomingAllstate Fire & Cas Ins Co$3,297
WyomingMid Century Ins Co$3,383

Renters insurance for college students

We found rental insurance knowledge wasn’t any better than car insurance. A bit over half (53%) of college students surveyed said they have some form of rental coverage.

What’s covered and what isn’t

The majority of those surveyed (63%) knew that renters insurance covers their personal possessions. However, only 29% correctly said it also covers items stolen from their car. Just 18% reported accurately that their guests’ injuries are covered by renters insurance. Even fewer (11%) knew that it pays for additional living expenses if the apartment is damaged.

When asked what renters insurance covers, here is how respondents’ wrong answers broken down:

Incorrect answers on renters coverage%
Structural damage to the apartment or other rented space39%
My roommates’ belongings20%
Me if I’m injured18%
Back rent due8%

two college students in dormReplacement value versus actual cash value, deductibles

Sixty-nine percent did know that replacement value is better than actual cash value when it comes to insuring your personal property. And 70% correctly answered that there’s a deductible attached to personal property claims. However, more than one-third mistakenly believed that you also pay a deductible for liability claims and for injuries.

How they bought their coverage – or why they didn’t

Though a year’s worth of renters insurance can cost less than a month of cable TV, 8% of those surveyed said they can’t afford it. Why else don’t young adults buy renters insurance? Seventeen percent don’t think it’s needed. Eight percent said they’ve never thought of buying renters insurance, while 6% plan to buy a renters policy, but haven’t yet. Here’s how those who have renters insurance got it and who pays:

How renters insurance was purchased%
I picked and paid for it26%
It’s my own policy but my parents helped me pick it10%
My parents chose the policy and pay for it7%
My parents chose the policy, but I pay for it5%
It’s my roommate’s policy and I pay into it3%

Buying renters insurance online was the top purchasing method. Forty-three percent bought a policy on a computer, 31% purchased a policy from an agent over the phone. Fourteen percent bought a policy on a mobile device. Eleven percent met with an insurance agent to close the deal.

Expert advice: Five renters insurance tips for college students

Don’t share a policy with your roommate. It’s true that you’re allowed to share a policy, and that saves money if you split the cost. But the savings is minimal, considering the total cost for coverage is typically under $200 a year. And, if a claim is filed on the policy, it will be on your claim history for three to five years, regardless of who filed the claim. That means if your roommate ends up making numerous claims on the policy, you could end up paying higher premiums for renters (and other types of insurance) long after your college team’s fight song is ringing in your ears.

college kids watching gameCheck with your parents before you buy your own policy. If your parents have home insurance and you live in a dorm on campus, you’re already covered under your folks’ homeowners policy. For those who live in a rental, it’s possible to get a renters insurance discount by bundling the coverage with your parents’ homeowners policy. That can be true even if you attend school in a separate state. But you will need to check with your agent first, as insurers decide on a case-by-case basis. If you had your parents co-sign your apartment lease, you can still be the named insured on the policy, with your parents endorsed as an additional non-occupant insured.

Opt for replacement value. The personal property section of your policy pays to replace lost, stolen or damaged items you own. Typically you can choose pay out amounts of $20,000 to $100,000. Because renters insurance is affordable, it’s recommended you get at least $40,000. However, if you have a lot of valuable possessions, $100,000 is best. Replacement value on your personal possessions will reimburse you for the full value of damaged or stolen items after you purchase the new replacement, and submit your receipts. While the up-front cost is greater, you’re more likely to receive accurate compensation for your possessions.

Buy as much liability insurance as you can afford. In addition to protecting your possessions, a renters insurance policy also offers liability coverage. Liability covers the cost for injuries if someone trips, falls or is hurt in your apartment -- if expenses are not completely covered by your guest medical coverage. Liability also provides protection against lawsuits a guest may file for injury or property damage you may have caused. The amount of liability protection that’s right for you depends on your personal assets’ value, but a minimum of $100,000 liability limits for college students is recommended. Ideally, you should carry $300,000 in liability. Before deciding on your limit, check your rental agreement. Many landlords require renters to purchase a specific liability limit amount.

Compare rates to get the best deal. Compare rates for the same coverage amounts from at least three different insurers. Insurance companies price policies differently, so the cost for coverage can vary significantly. By shopping around, you ensure that you don’t overpay.

Buying renters insurance: How much you can expect to pay, how much you can save

The most efficient way to net savings on renters insurance is to compare prices among companies. Each company will have a different price for coverage, as no two will assess the cost and risk the same way. If you don’t compare rates, you won’t know which is the most affordable.

Insurance.com’s rate analysis shows that the national average cost for the following renter profile:

  • $167 yearly or $14 monthly -- Renters insurance of $20,000 personal property, $500 deductible, $100,000 liability, $1,000 guest medical.

For renters the average savings for doing your homework on rates is $134. You’ll see in the tables below how companies compare on price. The savings is the difference between the highest and lowest rates fielded from up to eight companies in 10 ZIP codes in each state for the above profiles.

StateCompanyAverage rate$ savings
AlaskaUmialik Ins Co$73$42
AlaskaAllstate Ins Co$74
AlaskaSafeco Ins Co Of Amer$90
AlaskaState Farm Fire & Cas Co$115
AlabamaAlfa Mut Ins Co$130$376
AlabamaState Farm Fire & Cas Co$201
AlabamaAllstate Ind Co$212
AlabamaNationwide Prop & Cas Ins Co$270
AlabamaForemost Ins Co Grand Rapids MI$506
ArkansasState Farm Fire & Cas Co$151$247
ArkansasShelter Mut Ins Co$164
ArkansasNationwide Mut Fire Ins Co$180
ArkansasAllstate Ind Co$245
ArkansasFarmers Ins Exch$398
ArizonaState Farm Fire & Cas Co$135$193
ArizonaAllstate Ind Co$142
ArizonaAmerican Family Mut Ins Co$192
ArizonaFarmers Ins Exch$196
ArizonaNationwide Ins Co Of Amer$328
CaliforniaInterins Exch Of The Automobile Club$100$83
CaliforniaFire Ins Exch$128
CaliforniaState Farm Gen Ins Co$130
CaliforniaAllstate Ins Co$142
CaliforniaCalifornia Automobile Ins Co$155
CaliforniaCSAA Ins Exch$171
CaliforniaAmco Ins Co$183
ColoradoState Farm Fire & Cas Co$125$235
ColoradoAllstate Ins Co$139
ColoradoFarmers Ins Exch$164
ColoradoAmerican Family Mut Ins Co$224
ColoradoNationwide Affinity Co of Amer$360
ConnecticutAllstate Ins Co$94$195
ConnecticutAmica Mut Ins Co$133
ConnecticutState Farm Fire & Cas Co$150
ConnecticutTruck Ins Exch$289
DCAllstate Ins Co$140$76
DCNationwide Mut Fire Ins Co$171
DCState Farm Fire & Cas Co$216
DelawareTravelers Home & Marine Ins Co$125$210
DelawareState Farm Fire & Cas Co$126
DelawareAllstate Ins Co$132
DelawareNationwide Mut Fire Ins Co$249
DelawareLiberty Ins Corp$335
FloridaNationwide Ins Co Of FL$123$91
FloridaCastle Key Ins Co$137
FloridaState Farm FL Ins Co$214
GeorgiaGeorgia Farm Bureau Mut Ins Co$120$150
GeorgiaAllstate Ins Co$178
GeorgiaState Farm Fire & Cas Co$213
GeorgiaNationwide Prop & Cas Ins Co$270
HawaiiAllstate Ins Co$121$63
HawaiiState Farm Fire & Cas Co$127
HawaiiLiberty Mut Fire Ins Co$184
IowaAllstate Ind Co$96$105
IowaFarm Bureau Prop & Cas Ins Co$98
IowaAllied Prop & Cas Ins Co$100
IowaState Farm Fire & Cas Co$117
IowaIMT Ins Co$133
IowaFarmers Ins Co Inc$164
IowaAmerican Family Mut Ins Co$201
IdahoAmco Ins Co$95$123
IdahoAllstate Ind Co$107
IdahoFarm Bureau Mut Ins Co Of ID$145
IdahoFarmers Ins Exch$202
IdahoState Farm Fire & Cas Co$218
IllinoisState Farm Fire & Cas Co$135$54
IllinoisCountry Mut Ins Co$150
IllinoisAllstate Ind Co$161
IllinoisFarmers Ins Exch$180
IllinoisAmerican Family Mut Ins Co$189
IndianaState Farm Fire & Cas Co$120$209
IndianaNationwide Mut Fire Ins Co$161
IndianaAllstate Ins Co$182
IndianaUnited Farm Family Mut Ins Co$189
IndianaIllinois Farmers Ins Co$201
IndianaErie Ins Co$228
IndianaAmerican Family Mut Ins Co$329
KansasShelter Mut Ins Co$116$140
KansasFarm Bureau Prop & Cas Ins Co$119
KansasState Farm Fire & Cas Co$129
KansasAllied Prop & Cas Ins Co$139
KansasAllstate Ins Co$162
KansasFarmers Ins Exch$242
KansasAmerican Family Mut Ins Co$256
KentuckyAllstate Ins Co$132$53
KentuckyState Farm Fire & Cas Co$163
KentuckyNationwide Mut Fire Ins Co$168
KentuckyKentucky Farm Bur Mut Ins Co$185
LouisianaAllstate Ins Co$203$303
LouisianaState Farm Fire & Cas Co$268
LouisianaLouisiana Farm Bureau Cas Ins Co$506
MassachusettsState Farm Fire & Cas Co$115$253
MassachusettsSafety Ins Co$120
MassachusettsArbella Mut Ins Co$129
MassachusettsBunker Hill Ins Co$135
MassachusettsAmica Mut Ins Co$136
MassachusettsAllstate Ins Co$140
MassachusettsCitation Ins Co$150
MassachusettsMetropolitan Prop & Cas Ins Co$166
MassachusettsLiberty Mut Fire Ins Co$368
MarylandState Farm Fire & Cas Co$115$181
MarylandErie Ins Exch$128
MarylandNationwide Mut Fire Ins Co$193
MarylandAllstate Ins Co$296
MaineConcord Gen Mut Ins Co$75$56
MaineAllstate Ins Co$95
MaineState Farm Fire & Cas Co$131
MichiganAuto Owners Ins Co$45$262
MichiganCitizens Ins Co Of Amer$155
MichiganMemberselect Ins Co$191
MichiganFire Ins Exch$205
MichiganState Farm Fire & Cas Co$220
MichiganAllstate Ins Co$307
MinnesotaState Farm Fire & Cas Co$111$113
MinnesotaAmerican Family Mut Ins Co$146
MinnesotaAllstate Ins Co$175
MinnesotaFarmers Ins Exch$187
MinnesotaAuto Owners Ins Co$224
MissouriShelter Mut Ins Co$122$145
MissouriState Farm Fire & Cas Co$140
MissouriAuto Club Family Ins Co$167
MissouriAmco Ins Co$170
MissouriAllstate Ind Co$206
MissouriFarmers Ins Exch$223
MissouriAmerican Family Mut Ins Co$267
MississippiMississippi Farm Bureau Cas Ins Co$134$167
MississippiState Farm Fire & Cas Co$240
MississippiNationwide Prop & Cas Ins Co$246
MississippiAllstate Ins Co$296
MississippiAlfa Ins Corp$301
MontanaState Farm Fire & Cas Co$115$22
MontanaAllstate Ins Co$120
MontanaUnigard Ins Co$131
MontanaFarmers Ins Exch$137
North CarolinaNorth Carolina Farm Bur Mut Ins Co$103$122
North CarolinaState Farm Fire & Cas Co$141
North CarolinaAllstate Ins Co$150
North CarolinaNationwide Mut Ins Co$208
North CarolinaErie Ins Exch$225
North DakotaAllstate Ins Co$93$116
North DakotaState Farm Fire & Cas Co$94
North DakotaNodak Mut Ins Co$104
North DakotaNorth Star Mut Ins Co$146
North DakotaFarmers Ins Exch$209
NebraskaFarm Bureau Prop & Cas Ins Co$99$133
NebraskaAmco Ins Co$110
NebraskaState Farm Fire & Cas Co$111
NebraskaAllstate Ins Co$131
NebraskaAmerican Family Ins Co$147
NebraskaFarmers Mut Ins Co Of NE$160
NebraskaFarmers Ins Exch$232
New HampshireConcord Gen Mut Ins Co$80$60
New HampshireNationwide Prop & Cas Ins Co$100
New HampshireAmica Mut Ins Co$103
New HampshireAllstate Ins Co$106
New HampshireState Farm Fire & Cas Co$140
New JerseyNew Jersey Re Ins Co$110$143
New JerseyAllstate NJ Ins Co$117
New JerseyState Farm Fire & Cas Co$125
New JerseyHigh Point Preferred Ins Co$205
New JerseyForemost Ins Co Grand Rapids MI$253
New MexicoAllstate Ins Co$106$48
New MexicoState Farm Fire & Cas Co$125
New MexicoFarmers Ins Exch$154
NevadaState Farm Fire & Cas Co$128$192
NevadaACA Ins Co$189
NevadaAllstate Ind Co$199
NevadaFarmers Ins Exch$203
NevadaAmco Ins Co$320
New YorkAllstate Ins Co$114$63
New YorkLiberty Ins Corp$118
New YorkState Farm Fire & Cas Co$125
New YorkFarmers New Century Ins Co$177
OhioErie Ins Exch$127$184
OhioState Farm Fire & Cas Co$147
OhioAllstate Ind Co$182
OhioGrange Prop & Cas Ins Co$237
OhioNationwide Prop & Cas Ins Co$246
OhioFarmers Ins Exch$311
OklahomaShelter Mut Ins Co$159$118
OklahomaState Farm Fire & Cas Co$198
OklahomaForemost Ins Co Grand Rapids MI$227
OklahomaAllstate Ins Co$277
OregonAllstate Ins Co$105$139
OregonFarmers Ins Exch$131
OregonState Farm Fire & Cas Co$154
OregonCountry Mut Ins Co$222
OregonNationwide Ins Co Of Amer$244
PennsylvaniaAllstate Ins Co$89$125
PennsylvaniaErie Ins Exch$96
PennsylvaniaState Farm Fire & Cas Co$189
PennsylvaniaNationwide Mut Fire Ins Co$214
Rhode IslandAllstate Ins Co$109$153
Rhode IslandState Farm Fire & Cas Co$115
Rhode IslandAmica Mut Ins Co$128
Rhode IslandNationwide Mut Fire Ins Co$248
Rhode IslandMetropolitan Prop & Cas Ins Co$262
South CarolinaState Farm Fire & Cas Co$115$53
South CarolinaAllstate Ins Co$150
South CarolinaNationwide Prop & Cas Ins Co$157
South CarolinaTravelers Home & Marine Ins Co$168
South DakotaAmerican Family Ins Co$82$64
South DakotaAllstate Ins Co$92
South DakotaState Farm Fire & Cas Co$101
South DakotaFarm Bureau Prop & Cas Ins Co$103
South DakotaAllied Prop & Cas Ins Co$115
South DakotaFarmers Ins Exch$146
South DakotaFarmers Mut Ins Co Of NE$146
TennesseeTennessee Farmers Mut Ins Co$90$124
TennesseeAllstate Ins Co$166
TennesseeState Farm Fire & Cas Co$175
TennesseeErie Ins Co$214
TexasTexas Farm Bureau Mut Ins Co$144$215
TexasRepublic Lloyds$147
TexasState Farm Lloyds$215
TexasNationwide Prop & Cas Ins Co$281
TexasAllstate TX Lloyds$359
UtahFarm Bureau Prop & Cas Ins Co$100$53
UtahAllstate Ind Co$106
UtahState Farm Fire & Cas Co$126
UtahFarmers Ins Exch$153
VirginiaAllstate Ins Co$95$77
VirginiaErie Ins Exch$109
VirginiaState Farm Fire & Cas Co$135
VirginiaNationwide Mut Fire Ins Co$172
VermontConcord Gen Mut Ins Co$75$40
VermontVermont Mut Ins Co$100
VermontState Farm Fire & Cas Co$115
WashingtonAllstate Ind Co$131$28
WashingtonState Farm Fire & Cas Co$131
WashingtonAllied Prop & Cas Ins Co$134
WashingtonFarmers Ins Co Of WA$159
WisconsinAllstate Ins Co$91$68
WisconsinErie Ins Exch$95
WisconsinNationwide Ins Co Of Amer$105
WisconsinState Farm Fire & Cas Co$125
WisconsinAcuity A Mut Ins Co$139
WisconsinFarmers Ins Exch$159
West VirginiaAllstate Ins Co$122$237
West VirginiaErie Ins Prop & Cas Co$188
West VirginiaState Farm Fire & Cas Co$191
West VirginiaNationwide Prop & Cas Ins Co$359
WyomingState Farm Fire & Cas Co$125

 

Health insurance for college students

The Affordable Care Act (ACA) allows people to stay on a parent’s health plan until the age of 26. However, we found young adults don’t understand that provision.

A whopping 70% thought they get bounced off their parents’ health insurance before the age of 26. Only 25% of respondents knew the correct answer that they can stay on a parent’s plan until the age of 26.

How do 20-somethings get their health insurance? Here’s what we found.

Do you have health insurance?%
Yes, I’m on my parent’s policy and they pay for it.26%
Yes, it’s my own policy and I picked and paid for it.25%
Yes, it’s my own policy, but my parents helped me pick it.10%
Yes, it’s an employee plan.10%
No, I can’t afford it.8%
Yes, I’m on my parent’s policy, but I pay for my portion of it.7%
Yes, it’s a college health plan.5%
No, plan on buying at a later date.3%
No, don’t need it because on my parent’s plan.2%
No, I meant to buy but put it off so far.2%
No, never thought about it.1%
No, didn’t think I needed it.1%

 

Unlike other types of insurance, which are based upon risk, your behavior and circumstances, health insurance doesn’t take that into account. A person in poor health pays much higher life insurance rates than someone in excellent health. That’s not the case any longer with health insurance.

Nearly one-third of respondents said they pay less than $300 a month for health insurance. One-quarter of respondents said they spend at least $500 for health insurance monthly. Those differences aren’t connected to a person’s health. Instead, the differences in premium costs are related to the plan design. For instance, plans with higher premiums usually have lower out-of-pocket costs than lower-cost premium options.

We found that college-aged people mostly buy health insurance online. Forty-nine percent said they bought it on a computer and 10% used an app. Another 30% spoke to an agent on the phone, while 13% went to an insurance agent or bought it in person.

Health care confusion

Health insurance can be complicated. Even experts might get tripped up about specifics. We quizzed respondents on three different types of plans to gauge their health insurance knowledge.

We found that more than half failed to correctly name the types of health plans by their descriptions -- preferred provider organizations (PPOs), health maintenance organizations (HMOs) and high-deductible health plans (HDHPs).

  • 41% correctly said a PPO has higher premiums but comes with greater flexibility of providers.
  • 36% rightly said an HMO has lower premiums but a restricted network of doctors.
  • 35% correctly said an HDHP has lower premiums but a high deductible and out-of-pocket expenses, normally associated with a health savings plan.

Also, 57% identified health insurance copay correctly, 44% know the definition of a health insurance deductible and 33% understand coinsurance.

What do these terms mean?

  • Health insurance deductible -- Flat amount you must pay annually before health insurance kicks in to pay for services.
  • Copay -- Amount you must pay toward medical services (at the time of service) that are covered in your plan.
  • Coinsurance -- Amount of medical costs you pay after reaching your plan’s deductible.

Not having that knowledge could leave young adults without enough coverage or paying more than they need.

Expert advice: Five health insurance tips for college students

Cheapest isn’t always best. Buying health insurance isn’t like a typical shopping experience. You want to find the cheapest price for comparable cars. However, when it comes to health insurance, you want to run the numbers and think about your health needs to see what makes the most sense for you. For instance, you may find a plan with low premiums. However, make sure you check about the deductible and out-of-pocket costs. You may pay much more if you need health services.

young woman smiling with doctorMake sure your doctor is in a plan’s network. Doctors don’t accept every type of insurance and plan. Before signing up for a health plan, make sure to check with your doctor that he or she accepts the specific health plan. If your doctor doesn’t take that plan, you would have to switch doctors or potentially pay much more for your care.

Stay on your parent’s plan unless you find a much better deal. The ACA allows people to stay on their parents’ plan until 26. Rather than get your own health plan, it usually makes more sense to remain on your parents’ health plan. However, if you find your employer is offering a plan with lower premiums and out-of-pocket costs and a better provider network, then it could make sense to get your own plan.

Learn health insurance terms and basics. Five critical terms to understand are premiums, out-of-pocket costs, co-payments, deductibles and coinsurance. Knowing these terms will be essential when choosing a health plan. For instance, one health plan may offer lower premiums. A closer look could show you would have hefty deductibles and out-of-pocket costs. By understanding these terms, you’re able to compare plans side-by-side and see what makes the most sense for you and your situation.

Don’t rely on the emergency room for your regular health care. Young adults are busy people. There’s college, there’s the job search and then there’s the work to help you pay off your student loans. When does anyone have time for doctor appointments? If this sounds like you, make sure you set aside time for your health. Get your regular check-ups. Don’t rely on the emergency room for your health care. ERs aren’t the ideal place to get your regular care and it’s much more expensive. Regular check-ups with a primary care doctor might cost you nothing or very little. A trip to an ER could cost you hundreds or thousands.

Buying a health insurance plan: How much you can expect to pay

You likely had to prove you have health insurance when you enrolled. Your best bet is to stay on your parents’ plan until age 26. It’s often the cheapest option and likely the best coverage.

If your school offers a student health plan, you can get basic coverage through that. Often, colleges will automatically sign you up for the campus plan, and include the cost in your bill with your tuition, unless you get a waiver and opt out. The average student health insurance plan costs between $1,500 and $2,500 a year, according to the American College Health Association.

If you want to buy your own policy, you can use the Kaiser Family Foundation’s Health Insurance Marketplace calculator to get an estimate of the cost. The foundation is a non-profit organization that focuses on national health issues and its calculator provides cost estimates for plans purchased on the health exchanges.

Note that unless you have a special situation you can only buy a new individual health insurance plan during open enrollment, which varies by state but is typically from Nov. 1 to Dec. 15. If you’re working and your employer offers insurance, you’ll have to check with the company to find out its open enrollment. Employer-based insurance’s open enrollment varies and is up to the company.

One way that health insurance is different from other types is that you won’t get much better rates being 20 or 25 compared to 40 or 45. You’ll pay pretty much the same regardless of your situation. The cost difference for health insurance depends on the type of health insurance plan. For instance, PPOs will cost you more in premiums than HMOs and HDHPs. HDHPs will have higher out-of-pocket costs than either PPOs or HMOs.

So, when choosing a health insurance plan, you’ll want to take those factors into account.

Life insurance for college students

More than half of college-aged adults surveyed have a life insurance policy. Nearly one-third (30%) said they chose the life insurance policy themselves and pay for the coverage. Another 18% said their parents pay for their life insurance policy. One-in-10 said their parents helped them choose a life insurance policy.

The vast majority of those who bought a life insurance policy said they either purchased it online or spoke to an agent on the phone. Forty-one percent said they bought it online via a computer, while 36% said they got it over the phone. Only 18% purchased it at an insurance agency and 5% used a mobile app to get life insurance.

The most popular type of life insurance option for those surveyed is whole life. Whole life is a kind of permanent life policy, which stays with you for life as long as you make your payments.

Type of life insurance

  • 45% Whole life
  • 36% Term life

Forty percent said they don’t have a life insurance policy. There are multiple reasons:

  • They can’t afford it.
  • They didn’t think they needed it.
  • It’s too depressing to even think about.
  • They don’t have one now but will get one eventually.

20-somethings can find inexpensive life insurance

The good news if you don’t have life insurance is that your 20s are a perfect time to buy it. You’ll find much cheaper rates in your 20s than you will later in life. 

Life insurance companies base their rates and approval on risk. If you’re in your 20s, you likely won’t need life insurance for many decades. Hence, you get lower rates than if you’re in your 40s or older.

How much do college-aged people pay for life insurance? Here’s what respondents said.

Annual life insurance premiums

Amount paid%
$101 to $20021%
$201 to $30021%
Less than $10016%
$301 to 4007%
$401 to $5005%
More than $5005%

As part of our survey, we gauged respondents’ life insurance knowledge. Most young adults surveyed have a good understanding of the types of life insurance.

  • 58% correctly knew the definition of term life insurance.
  • 85% accurately knew at least one kind of permanent life insurance.
  • 58% understood that term life is usually cheaper than whole life.

Expert advice: Five life insurance tips for college students

Buy life insurance when you’re young. You may want to get married and start a family before even thinking about life insurance. That could be a mistake. If you wait until your 40s, you’ll pay hundreds more a year for coverage. It’s better to buy a policy in your 20s, get a lower rate and have that locked in for either your life (whole life or permanent life) or a period (term life).

group of young studentsFigure out what you want from life insurance. Choosing between permanent and term life depends on why you want life insurance. Permanent life insurance, such as whole life, would make sense if you want a guaranteed death benefit and don’t mind paying more for coverage. Term life is a better option if you want to make sure your loved ones get a larger death benefit during your peak earning years. A term life policy may make more sense if you already bought a house, have a mortgage and want to make sure your loved ones can pay that off if you were to die during the period.

If your parents co-signed a personal student loan, be sure to have life insurance. If your parents, a spouse or relative co-signed a private student loan to help you pay for college, and you pass away, the co-signer will be responsible for paying off the loan. In some cases, the balance may be due soon after your death. That’s why it’s prudent to have a life insurance policy and name your co-signer as a beneficiary. The policy payout can be used to pay off your debt.

Add riders to your policy to create a plan that works for you. Term life policies allow you to add riders. You can tap into some of these riders while you’re still alive. One rider enables you to waive premiums if you were to lose your job. Another rider lets you dip into your death benefit if you get a chronic illness or need long-term care. Ask about available riders when you’re getting quotes from life insurance companies to see if one makes sense for you.

Shop around and make sure you stick with reputable companies. When shopping for life insurance, get quotes from multiple life insurance companies. Request quotes for the same level of coverage, so you can compare the options. Just as important, make sure you’re comfortable with the insurer before getting a policy. That includes checking the insurer’s financial stability ratings.

Buying a life insurance policy: How much you can expect to pay

You’ll see in the table below the average costs for term policies for males and females age 20. New players in the life insurance market such as Leap Life and Haven Life offer term life policies that you can apply for online. In some cases, you can be instantly approved and can skip a medical exam. But even if you can’t, getting approval and buying a policy still takes much less time – two weeks instead of four to six weeks – than going the traditional route.

Average annual term life insurance costs for $250,000 policy

Age, gender10 years20 years30 years
20-year-old female$174$217$285
20-year-old male$207$259$357

Source: CompuLife, rates for September 2019. These rates are for Premium Plus health status, which is the highest level.

Lifelong learners: Graduating to smart insurance moves in the future

Understanding insurance will help you through a lifetime of major financial decisions. The main rule of thumb to remember is that insurance offers you piggy bank with grad hatprotection and you want enough to cover your assets. You don’t want to be left wishing you purchased insurance after a major catastrophe, but be able to sleep well at night knowing you and your possessions are well protected.

Insurance is not a one-time thing. Even after you buy auto, renters, health and life insurance – be sure to continually review your insurance portfolio to make sure it is still right for your needs. Needs evolve and change as young adults spread their wings into the big world.

Comparison shopping is essential after major life events such as graduating college and living independently on your own, getting married and having kids. Your needs and financial protection requirements will change, so adjust them when necessary.  If you buy a newer car or go from renting to owning a home, update your coverage and shop around for the best price.

As your health changes, see what plans are right for you. And even life insurance isn’t a one-time buy. If you end up with more financial assets or bigger family than you expected when you bought life insurance as a 20-year-old, you should reevaluate your insurance needs. You can buy a supplemental policy if you need more life insurance coverage. And if you’re married, you likely will want to buy a policy for your spouse as well.

*Methodology

Auto and renter rates – Insurance.com commissioned Quadrant Information Services to field rates for various college-age profiles  and coverage levels from up to six insurers in 10 ZIP codes in each state.

Survey -- Insurance.com commissioned Op4g to field a survey in September 2019 of college-age adults.

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