2008 Insurance Guide
A new grad's guide to insurance

Not worried because you're not making much now? Someone who gets a judgment against you can hang onto it until you're earning more, then garnish wages. And that's a real concern for students entering or exiting law school or medical school, who can eventually anticipate six-figure salaries.

"People see it as an opportunity," says Loretta Worters, vice president with the Insurance Information Institute, an industry organization.

In general, college grads are "not aware of how suable they are," says Hungelmann

With your auto policy, make sure there's at least $300,000 in liability coverage (and $500,000 is better), he says.

Another smart tip: Make sure the policy is written so that the per person coverage limit is the same as the per incident limit, says Hungelmann. Many policies will cover a set amount for one accident, but set much smaller limits for each person injured in that accident. If you have $300,000 in liability coverage, the policy might cap per person injuries at $100,000. So if another party's hospital expenses total $200,000, instead of being covered, you'll be hit with a bill for $100,000.

6. Set deductible limits

Think carefully about your deductible limits. The litmus test for setting deductibles is determining how vital the resource in question is (car, laptop, cell phone), how quickly would you need to replace it, and how hard would it be to lay your hands on the $100, $250, $500 or $1,000 in that time frame?

If you need the car to get to work and an extra $500 one week (or month) would put you in the poor house, then that $100 or $250 deductible is the way to go.

Whatever amount you set as a deductible, start saving, and bank an equal amount. That way, if you have a loss, you have your own personal insurance policy, too.

7. Free money? Take it! 

Take the free retirement money offered at work. Does your employer offer a retirement plan and match part of your contributions? Take the money and run, says Feldhaus.

Right after you've graduated, the last thing on your mind is retirement. But this is one insurance policy that will pay big dividends. Best of all, it's all under your control.

If you can't afford the max in the beginning, don't worry about it. "The amount is not important," says Feldhaus. "It's developing some systematic approach to save for retirement. And this is one item I would certainly recommend."

Dana Dratch is a freelance writer in Roswell, Ga.


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