What happens when young adults leave their parents'' insurance policy

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When young adults graduate from college and start living on their own, several changes result that differ significantly from when they were living with their parents. Not only do they start taking on added responsibilities, but their financial obligations become more significant as they start to pay for their own rent, food and car.
Kiplinger.com* indicates something else they do is start paying for their own auto insurance, as insurers often require young adults who were originally under their parents' plans to buy their own policies.
Perhaps because of its ease or parents' influence, these young adults often sign up for their own policy with the same provider they had under their mom and dad.
But as the source indicates, it pays to shop around.
"Even if you're happy with your policy, it's a good idea for anyone of any age or life stage to examine his or her coverage now and then to make sure he or she is getting the best deal," the financial news periodical indicates. "But it's especially important for young adults because several factors that go into calculating your rate are in flux in your twenties and thirties."
It pays to get older
Advancing in age is particularly beneficial for young policyholders, as the source indicates. Young drivers tend to have the highest rates, as statistics suggest teenagers are involved in traffic accidents more frequently than people who are older. The older individuals get, the more likely it is their rates will decline, provided they have a good traffic safety record.
Establishing good credit can help policyholders save
The building of credit can also have influence on premiums. Kiplinger.com notes that because young people often have limited credit, it can initially result in higher insurance rates. But as younger policyholders age and consistently make their payments on time, insurers often respond favorably by lowering rates.
Graduating from college may yield savings
Not only does getting older and having strong credit work in a young policyholders favor, graduating from college can also play a role in lower rates. Kinglinger.com cited how insurers look upon college graduates favorably, especially those with advanced degrees. Citing a study from Insure.com, the source indicates jobs that require graduate work tend to have the lowest rates.
Insurance shopping has never been easier
Kiplinger.com says the internet has made it easier than ever to shop for insurance. There's a wide variety of comparison websites, which price and contrast various providers and estimate what policyholders’ costs will be based upon certain factors they fill in, such as vehicle type, age and residence. However, some providers require that policyholders contact them directly.
Either way, insurers have increased the ways in which policyholders can obtain auto insurance coverage and the ways in which they can lower their monthly premiums.
*according to Kiplinger.com on Jan. 31, 2012

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