Insurance for Early Adulthood

​​​​​​​​​​​​​​​​Young people standing in a group

Last Updated: May 24, ​2023

For a young single adult, safeguarding your future is a chief concern in determining your insurance needs. Finding the right balance of coverage and cost is important when you’re starting out. 

If this is your first time navigating an insurance purchase on your own, it is important to understand the special terms that are used in the insurance industry and get acquainted with how insurance works. 

If you or your child are starting college, it's a good idea to review your current car insurance policy to make sure it provides the coverage you need. Factors such as who owns the car, whose name is on the car title, what the driver's permanent address is, and if the driver will be attending college in a different state may all factor into your coverage.

This video tutorial from the National Association of Insurance Commissioners is a great place to learn the basics of auto insurance: Auto Insurance 101 Video from the NAIC  

Save Mo​​ney

​​One of the best ways to save on your automobile insurance is to be a safe driver with a clean driving record.​ Many insurers offer discounts for good grades in school, often for maintaining a grade of B or better. Taking an approved driver safety class can also result in a discount.​​

Ride Sharing

Across multiple countries, consumers aged 18-34 are the most open to participating in the sharing economy. If you are offering rides to paying customers through a Transportation Network Company (TNC), such as Uber or Lyft, Wisconsin law requires that you have insurance coverage that goes beyond the typical personal policy. Before driving for a TNC, you should contact your personal auto insurer and determine what coverage, if any, will be available while offering rides in your covered vehicle. You should also review any contract you have with a lienholder to ensure that you are not violating the terms of such an agreement.

Be sure to review the TNC's commercial policy to find out what is covered and what is not. Uber and Lyft offer contingent collision and comprehensive coverage that takes effect when the driver accepts a ride request or has a passenger in the vehicle. However, drivers must elect to purchase and add these coverages to their personal auto insurance. Some personal auto insurers may not offer the additionally required insurance.

It's important to note that even if you have the required enhanced liability coverage, it may not protect you against physical damage to your vehicle while you are logged into a TNC's network. This gap in coverage could be a problem if you have not paid off the loan on your vehicle. Driving your car without physical damage protection could violate the terms of the loan agreement between you and your lender. If you totaled your vehicle in a crash while driving for a TNC, your loss would not be covered and you would still owe your lender the balance of your loan.

TNC coverage typically only applies while you have the app turned on. Freelance rides may not be covered. If you have turned off the app or you accept a street hail, you may not be covered. Failure to maintain the appropriate coverage could result in fines or loss of your license. ​

On-Demand Delivery Drivers 

Call your car insurance company before using your car for work. If you don't have the right car insurance for your delivery work, you could get stuck paying big auto accident bills yourself.  

There might be auto insurance provided by the service. Check their website for any coverage. Make sure you understand where the provided coverage ends and begins, and whether there's a coverage gap between their policy and your personal auto insurance policy.

Mopeds and Scooters​

Wisconsin's mandatory insurance law applies to mopeds and scooters. Any insurer offering motorcycle ​coverage likely offers moped coverage as well. Ask your insurance agent for more information about moped insurance.

Don't forgo health insurance, even if you feel you are healthy. Health emergencies can happen at any time. ​ A broken leg can cost around $7,500. Three days in the hospital could cost over $30,000. Without proper health care coverage, you could risk your financial standing, even bankruptcy. 

​Stay on a parent's plan until you turn 26

If a parent's health insurance plan covers dependents, you usually can be added to their plan and stay on it until you turn 26. Your parent can add you to their insurance during the plan's yearly Open Enrollment Period or during a Special Enrollment Period.  

Once you're on a parent's job-based plan, in most cases you can stay on it until you turn 26 even if you:

  • Get married
  • Have or adopt a child
  • Start or leave school
  • Do not live in your parent's home
  • Aren't claimed as a tax dependent
  • Turn down an offer of job-based coverage

If you're covered by a parent's job-based plan, your coverage usually ends when you turn 26, but check with the employer or plan for the exact date.

Turning 26 soon? Time to take action.

​​When you age off a parent's job-based plan, you qualify for a Special Enrollment Period to buy health insurance.

If your employer offers health insurance, losing your parent's coverage qualifies you to enroll in a plan outside its yearly Open Enrollment Period. Contact your human resources representation before turning 26 to learn how to get enrolled.  

If you do not have access to employer-based health insurance, you can sign up for a plan on the Health Insurance Marketplace​ . Your Special Enrollment Period starts 60 days before you lose coverage and ends 60 days after.

IMPORTANT: If your employer offers health insurance and you decide not to enroll in it, you generally won't qualify for a premium tax credit and other savings based on your income to buy a Marketplace plan. You'd have to pay full price.

Understand your insurance 

If you have insurance through your employer, make sure you understand what is covered, what doctors and specialists you can see (your network), and how much your deductible, copayment, and coinsurance are.​

Renters and Homeowners insurance helps cover the cost to replace your possessions if they are damaged or stolen. The easiest way to determine value is to make a complete inventory of your belongings and try to determine their value at the time of inventory. Invento​ry and reevaluation of your belongings should be done annually. 

  • ​​If you live on campus in a dorm, your parents’ homeowners policy may still cover your belongings, although they should check with their insurance agent to make sure. If you rent an off-campus apartment, you will probably not be covered by your parents’ homeowners insurance policy. Your landlord’s insurance will only cover the building, not your possessions. 
  • If you are looking to buy a house soon, check out our New Homeowner section.