There are many things that a student may insure, from their life and possessions, to their car and health. But, many students have a limited amount of experience with insurance. This does not make them bad at picking insurance, it just means that they may overlook or overestimate things. Plus, there are lots of insurance “tips” that are bogus, but have been taken as common knowledge. There is also a common belief that comparison sites offer insurance in the same way that tourism sites offer package holidays. Taking out insurance is far more detailed, because if it is done incorrectly then it may lead to a person paying too much or paying for inadequate cover.
Here are 8 tips on how to choose insurance for students:
Pick the type of insurance cover you want
There are lots of types of insurance, such as health insurance, life insurance, home insurance, etc. As a student you are going to need some insurance policies more than others. For example, you are not likely to need pet insurance, home insurance, critical illness insurance or life insurance. However, there is a chance that you will need health insurance, dental insurance and rented accommodation contents insurance (also known as home contents insurance).
Ask yourself if your cover is viable in your situation
People tend to worry about more than they should, and the insurance companies thrive on this irrational fear. It is true that we are a risk from all sorts of things every day of our lives, from having our pockets picked to being beaten up by a Mexican mafia gang. But, statistics do not really have anything to do with risk; it has more to do with bad luck. For example, statistically, flying is the safest form of transport ever invented, but–tell that to the people on the plane that crashed upon takeoff.
What you need to do is take a cold and logical look at your situation and ask yourself if you are unlucky enough to need insurance. Before you take out the insurance, ask yourself if you can tip the odds in your favor. Are you unlucky enough to have your credit card stolen? Or could you buy a waistband to wear under your clothing and zip your card into that? Is your Smartphone the device you must take with you on a boozy night out? Or can is stay under your pillow until you get home?
Does your risk heavily outweigh the cost of cover?
This is another little aspect that tricks a lot of people, because it involves a little bit of deceptive math. Here is an example:
Bob-Todd Jr buys a laptop and a Smartphone ready for a three year stay at college. Both are bought new with the money he inherited from his grandpa’s potato farm. The laptop costs $2300 and the smartphone costs $600. That is a total of $2900, and Bob-Todd would like insurance.
The cost to insure those two things is $45 per month and Bob-Todd thinks he has a good deal. Over three years that comes to $1620, which means that Bob-Todd’s total expenditure on the items is $5120. If you were in Bob-Todd’s shoes, would you spend $5120 on a laptop and smart phone?
Can you not get cover as an addition to your current financial service?
There are quite a few financial services that offer free insurance. It may be a case of spending a little more on your health insurance in order to get extra dental insurance, or paying a slightly higher rate on your credit card to get overseas health insurance. There is also work insurance and certain paid organizations will offer you some sort of medical or life insurance, especially if you are a student within a military setting.
Would you save more if you were on a parent’s policy?
There are family plans for car insurance and health insurance that you may wish to consider. A lot of insurance firms are itching to put children on their parent’s policies, as they like to get people interested in buying insurance at an early age, and going through their parents is a great gateway method.
Research your options online
There are lots of types of insurance that cover a lot of different things. There are policies that you will have never heard of, and schemes that you would have never thought to ask for. A lot of good deals are better found when the student does a little research first to find out what his/her options are.
Run multiple comparison searches with differing cover and terms
For example, when you buy car insurance, try running a search for full comprehensive and third party fire and theft. Run a search with and without the option of it being stored in a garage overnight. You may find that the cost reduction of keeping it in a garage overnight is more than the cost of a garage rental. The same is true for things such as car alarms. Your car having an alarm may be such a big factor in your premium quote, that it may actually be cheaper if you installed an alarm rather than pay the inflated insurance premium.
Be sure you can afford the premiums each month
This is a big factor, because $20 per week on your car insurance may not seem like a lot, but it is $1040 when it is stretched over a year, which is probably more than your car is even worse. Maybe you should consider selling your car and buying a cycle.