Insurance needs for millennials

From major recessions to student loan debt and spiking housing costs, millennials are no stranger to financial turbulence. However, in 2024 the majority of Gen Y-ers reported a positive personal financial outlook, with most saying they’re optimistic about achieving their financial goals.

If you’re a millennial working toward financial independence and growth, protecting your assets is a must — and your first line of defense is insurance. But how do you know what types of insurance you need, and what policies are right for you? In this article, you’ll learn how insurance can help you secure your financial future, plus find answers to top insurance-related questions.

Auto Insurance

Auto insurance protects you against loss in the event of a collision or other vehicle-related incident. Most states require every driver to have an insurance policy, so it’s important to select a policy that’s both affordable and offers the right amount of coverage to fit your lifestyle.

What is the best auto insurance for millennials?

The best auto insurance for a millennial will depend on several factors like age, driving record, how many miles per year you drive, and where you live. In general, the goal should be to find a policy that provides the most coverage for the most affordable premium.

To help you understand your options and weigh which types of coverage are right for you, let’s break down the basic coverages and optional add-ons.

Coverage types

• Liability coverage is the minimum policy required by most states. This option covers any repair costs or medical bills for accidents in which you were the at-fault driver.
• Collision coverage pays repair costs for your vehicle after an accident once your policy’s deductible amount is paid. This coverage also reimburses you if your vehicle is deemed a total loss.
• Comprehensive coverage pays for repairs due to non-collision incidents, like theft, fire or hail damage.
• Medical payments and personal injury coverage covers a specified amount of medical costs if you or your passengers are injured in an accident, regardless of who is at fault.
• Uninsured/underinsured motorist coverage pays for any gaps in expenses that might occur if you’re hit by a driver with insufficient auto coverage (or none at all).

Optional add-ons

• Roadside assistance provides service at no out-of-pocket cost if you have a roadside emergency like running out of gas or getting a flat tire.
• Loan and lease gap coverage covers the difference between your car’s value and what you still owe on your lease if you have an accident that totals your vehicle.
• Full glass coverage pays to replace cracked or broken windshields — no deductible payment required.
• Pet injury coverage helps pay medical bills for your furry companion if they’re injured in an accident.

These are only a few of the additional coverages available, so be sure to discuss your options with an independent agent. They can help you make the best decision based on your preferences and lifestyle.

How can I make my auto insurance more affordable?

Auto insurance costs vary widely, so it’s always smart to get multiple quotes before selecting a policy. “The top factors impacting auto premiums are generally driving record, age and credit,” says Matt Cavanaugh, Associate Vice President of Auto Product Development for Personal Lines at Grange Insurance, an affiliate of Integrity Insurance. Although you can’t do anything about your age, working to maintain a clean driving record and good credit can certainly pay off in your premiums.

Most companies also offer discounts to reduce policy costs. Some common auto policy discounts include:

• Multi-policy discounts for bundling multiple policies with one provider
• Paid in full discounts for paying your yearly premiums up front, rather than monthly
• Good student discounts for students who maintain high GPAs
• Paperless discounts for signing up to receive communications digitally

As always, your agent is the best source of information, so be sure to ask them if you qualify for any discounts when they’re setting up your policies.

Homeowners insurance

As of 2024, the scales of homeownership have tipped and now approximately 55% of millennials own their homes rather than renting them. And with this homeownership boom, more millennials are also having to shop for homeowners policies.

Homeowners insurance provides financial protection for your home and belongings, along with liability for injuries or damages to others. Most mortgage lenders require a homeowners policy before you can secure a mortgage, so if you’re in the home buying process, you’ll need to examine your coverage options to ensure your home investment is sufficiently protected.

What are my coverage options for homeowners insurance?

Basic homeowners insurance policies offer coverage in three main areas:

• Dwelling coverage protects against damage to your home’s physical structure. This damage could be brought about by storms, fires, or other perils.
• Personal property coverage protects against losses to the personal items and belongings inside your home.
• Personal liability coverage takes care of legal fees, settlements, or other financial obligations that could arise if you cause injury or damage someone else’s property.

There are other coverages you can add to your policy to provide more financial protection. These add-ons include:

• Underground service line coverage pays for repairs to water, waste, heating, cable, or other service lines that are usually the homeowner’s responsibility.
• Equipment breakdown coverage provides financial help if your heating, cooling, or ventilation systems break down.
• Personal cyber insurance protects your data, software and smart home systems against financial losses due to cyber attacks.

These are only a few examples of add-on coverages that can provide you with more peace of mind. Be sure to vet a few providers and ask about these optional coverages before deciding on a policy.

How can I save on my homeowners insurance policy?

Just like auto insurance, bundling can help you save money. Many insurers offer a multi-policy discount when you combine your home and auto coverage under the same provider.

Other ways to save include:

• Smart home alarm discounts that offer savings if you outfit your home with a monitored alarm system
• Paid in full discounts for paying your yearly premiums up front rather than in monthly installments
• Home buyer discounts for first-time home buyers

An independent agent can compare multiple carriers to help you identify which discounts apply and where you can get the best overall value.

Do I need extra coverage if I work from home?

Although we’re several years removed from the work-from-home boom brought on by the 2020 pandemic, many employees never returned to the office. In fact, 84% of millennials report that they now prefer remote work.

If you’re a millennial who works from home, this may have implications for your insurance. Sonja Todmann, Director of Product Development for Grange Insurance, an affiliate of Integrity Insurance, explains:

"If you work remotely for a corporation, you may need additional coverage beyond your standard homeowner’s policy.  Here's a general rule of thumb:

• Company equipment: Your employer's insurance typically covers company-owned equipment. However, verify this with your employer.
• Personal equipment used for work: If you use your own computer or equipment for work, your standard homeowner’s policy may provide limited coverage but may require additional coverage for high-value setups.
• Liability: If you have work-related visitors at home, standard homeowner’s liability coverage might not apply. Talk with your agent to consider additional protection.”

Similarly, if you have your own business out of your home, this also shifts your policy needs. “For home-based businesses, consider a home-based business endorsement which is typically available in two forms—one for equipment (computers, tools, inventory) and one for liability,” says Todman. “These endorsements typically have a coverage limit for business property inside your home and a lower limit for business property away from home.”

Renters’ insurance

While slightly over half of millennials are now homeowners, this means that a significant number still rent their homes. If you’re a millennial renter, renters’ insurance can be a great way to protect yourself financially.

Renters’ insurance provides coverage in three key areas:

• Personal property coverage protects you against theft or damage to your belongings.
• Personal liability protects you in the event that someone is injured on your property.
• Additional living expenses pays for temporary housing and other related expenses if your rental property becomes uninhabitable due to a covered event.

Some insurance providers may have additional coverages so you can better tailor the policy to your needs, so be sure to ask about all the options available.

Is renters’ insurance mandatory?

Renters’ insurance is not required by state or federal law, but some landlords or leasing companies may require it as part of a lease agreement. Even if your lease doesn’t require renters’ insurance, it’s always recommended, as it prevents you from significant losses if unexpected events (like thefts, injuries or accidents) should occur.

Life insurance

Life insurance provides financial support to your loved ones in the event of your death. The policy pays out a lump sum, called a death benefit, to your chosen beneficiaries. This money can help cover living expenses, mortgage payments, debts, or future goals like college tuition, helping to protect your family’s financial stability when you’re no longer there to do so.

When is the best time to buy life insurance?

The best time to buy life insurance is when you’re young and healthy — and that makes millennials an ideal group to consider it now. Premiums are typically lower when you’re in good health and have fewer risk factors, so locking in a policy earlier can save you significantly over time.

Life changes like getting married, buying a home, or having children are also prime times to reevaluate your life insurance needs.

What are my life insurance options?

There are two main types of life insurance:

• Term life insurance provides coverage for a set period (like 10, 20, or 30 years). It’s often the most affordable option and a popular choice among millennials looking for solid protection during their prime earning years.
• Permanent life insurance (including whole or universal life) offers lifelong coverage and a cash value component that can grow over time. Although premiums are higher, it can serve as a long-term financial planning tool.

Your choice will depend on your goals, budget, and the level of financial support your loved ones would need if you passed away.

Integrity Insurance does not offer life insurance. Consult with your independent agent to learn about your life insurance options.

Get advice from a specialist

Whether you’re purchasing your first auto policy or reassessing coverage as a new homeowner, having expert guidance can make all the difference.

An independent insurance agent can help you compare quotes from multiple carriers, customize coverage to fit your unique needs, identify discounts you may qualify for, and ensure you have just the right level of coverage.

Ready to find the right coverage for your stage of life? Connect with a local independent agent today.

References
- CFP Board
- Motley Fool Money
- AOL Articles
- Venn

Coverages described herein may not be available in all states. Please contact a local independent Integrity agent for complete details on coverages and discounts. If the policy coverage descriptions herein conflict with the language in the policy, the language in the policy applies. The material provided above is for informational, educational, or suggestion purposes and does not imply coverage. WE RESERVE THE RIGHT TO REFUSE TO QUOTE ANY INDIVIDUAL PREMIUM RATE FOR THE INSURANCE HEREIN ADVERTISED. Integrity Insurance policies are underwritten by Integrity Insurance Company, an affiliate of Grange Insurance Company, and Integrity’s subsidiaries. Integrity companies not licensed in Pennsylvania. Not all Integrity companies are licensed in all states.