Graduation season is a time of celebration—and big changes. Whether your child is heading off to college , starting their first job, or moving into a new apartment, it’s an exciting step toward independence. But it’s also a time when responsibilities become very real. How can you help your graduate determine what insurance they need moving forward?
At South Carolina Insurance Brokers (SCIB), we’re here to educate and guide you through the transition with confidence, so you and your graduate can focus on the future.
Auto Insurance: What’s Covered Now?
If your graduate is taking a car to college, staying on your family’s auto insurance policy might still make sense. In fact, students often qualify for good student discounts, or they can qualify for a distant student discount if they’re attending school more than 100 miles away and don’t have regular access to a vehicle. (I didn’t even know that was a thing until I started working at SCIB!)
On the other hand, if they’re moving out permanently, buying their own car, or starting a full-time job, it might be time to help them set up their own policy.
Tip: Do you know how important changing a “garaging address” is? You need to!
Here is some helpful information about auto insurance coverage:
Personal auto insurance is a package policy providing four coverages – liability, medical payments, uninsured and underinsured motorist coverage, and physical damage. The two you’ll be most familiar with are liability and physical damage:
- Liability insurance pays up when your graduate injures another person or damages their property (such as their car) in an accident that is their fault. A minimum amount of liability protection is required by statute in every US state but one (and it’s not South Carolina!) so they will need this no matter what.
Tip: Make sure your graduate has adequate coverage—not just the minimum. Minimum limits are almost never enough to protect them following an accident that is their fault. - Physical damage covers the cost to repair the damage to your graduate’s car. The nicer the car, the higher the insurance but don’t be tempted to cheap out on coverage
Tip: Check out “gap” coverage. This covers the difference between the actual cash value (ACV) of the vehicle, which is often less than you owe, and the amount insurance would pay to replace the vehicle if it’s “totaled” in an accident. Life saver.
Renters Insurance: Protecting Their First Home
Many graduates’ first apartments aren’t just a place to crash—they’re their first real homes. Most new renters assume that their personal property is covered by the building’s insurance but, no. Your graduate is responsible for protecting their own belongings in case of fire, flood, theft and so on. Helping your graduate secure renters insurance is a simple but meaningful way to help protect them, and their belongings, as they transition out of the nest.
Renters insurance is affordable and critical. It covers:
- Personal property (laptops, clothes, furniture)
- Liability protection (if someone gets hurt in their space)
- Temporary living expenses (if their apartment becomes unlivable)
Tip: Have your graduate make an inventory of the items in their new place that would need to be replaced in case of theft or fire, for instance. Sometimes it even helps to take photos to keep a visual record of things that are covered in case of an unfortunate event.
Health Insurance: What Changes After Graduation?
Thanks to the Affordable Care Act, young adults can usually stay on their parents’ health insurance until age 26. But if your graduate gets a job that offers health benefits, they’ll need to decide whether to stay on your plan or switch to their employer’s coverage.
Tip: Employer-sponsored plans often offer valuable benefits like dental and vision insurance. Encourage them to review options carefully—and we’re always here to help explain the fine print.
Life Insurance: A Smart Step for Young Adults
Life insurance might not be the first thing a young adult thinks about, but it’s worth a conversation. If your graduate has student loans, dependents, or simply wants to lock in lower rates while they’re young and healthy, a small term life insurance policy can be a smart and inexpensive step toward financial independence.
Tip: If they’re planning to be financially independent (congratulations!), they might want to consider disability insurance that would cover them in case they were injured and unable to work for a period of time.
Celebrate This Milestone—Confidently
Congratulations to all the graduates—and to the proud families who helped them get there! Graduation marks the beginning of new adventures—and new responsibilities—so keep supporting your young adult as they graduate to this new phase of life.
Schedule a Graduate’s Guide to Insurance 30-minute chat with one of our insurance experts.
It’s a no-pressure, educational discussion that will help walk you and your graduate through the ins-and-outs of insurance coverage.
