Graduating from high school or college is a major milestone and comes with new responsibilities, including managing insurance needs. Whether driving a car, renting an apartment, or planning for your health, understanding basic insurance coverage is essential for financial protection.

For cheaper car insurance it’s smart to stay on your parent’s policy, if possible. However, if you need a policy, shop around for quotes and inquire about discounts for good grades, safe driving courses, and policy bundling with renters insurance. Also, understand key car insurance terms such as liability coverage which pays for damage you cause to others’ property or injuries to others. Iowa law requires minimum liability coverage of $20,000 of bodily injury to or death of one person in any one accident; $40,000 because of bodily injury to or death of two or more persons in any one accident; and $15,000 because of injury to or destruction of property of others in any one accident. Collision coverage pays for damage to your car from an accident after you pay the deductible or the out-of-pocket amount. Comprehensive coverage may reimburse for non-collision incidents like theft, animal collisions, or weather damage. If your car is going with you to a dorm or apartment, report the change of location to your insurance company.

Your personal property will need protection, too. First, check with your parents to see if their homeowners policy extends coverage to a student living in a dorm or apartment. If not, renters insurance is essential and approximately $20 a month. It protects your personal belongings against theft and fire, and many landlords require it. Renters insurance also provides liability coverage, and additional living expenses in case your dwelling becomes uninhabitable by a fire or storm disaster. The policy may also cover your property if it is stolen from your car. Be sure to take inventory of your belongings and choose coverage that matches their value. If you are purchasing a home, homeowners insurance will be required by the mortgage company.

Even young, healthy people need health insurance. Under federal law, you can stay on your parent’s health insurance until age 26. If that’s not an option, explore health plans that cover essential services like preventive care, emergency services, and prescriptions. If you obtain a job with benefits, an employer-sponsored health plan is often the most affordable and comprehensive choice. Another option to consider is a Marketplace plan through HealthCare.gov. You may qualify for subsidies to lower your premium. Also, if you’re pursuing further education, universities often offer cost-effective coverage.

Always speak to a licensed insurance agent regarding all your insurance options, and compare several companies before purchasing any insurance policy. Higher deductibles can lower your premium but mean more out-of-pocket costs if you file a claim. Starting your insurance journey early helps you build good habits and financial resilience.

Sonya Sellmeyer is the consumer advocacy officer for the Iowa Insurance Division.