How to Deal With Insurance When You Start Your First Job

Getting a job out of college is hard enough, what with all the resumes you send to employers, the applications you fill out for the ones who are interested, and the telephone and onsite interviews that stand in the way of getting an offer. Once you accept an offer, you think the hard part is done.

Then, when your first day finally arrives, you can pretty much count on a human resources representative bombarding you with even more documents to sign before you ever even catch a glimpse of your desk.

Regardless of how tedious and inconvenient it might seem, it’s extremely important to pay attention and understand every document that’s placed in front of you before signing. You’ll likely receive several disclaimers, agreements, and other contracts, as well as a thick packet explaining all your new insurance benefits.

Here are a few things to look for to help you sort through the paperwork, understand your new medical benefits, and make sure you’re taking advantage of all the coverage you deserve:

• Understand your available coverages. Read all of the fine print to make sure you understand which types of doctors and treatment your benefits will cover. If you visit a specialist’s office or any office that’s not in your insurance network, you could be in for a big surprise when you get the bill.
• Understand your deductibles and co-payments. Some entry-level employees believe if they’ve got a medical benefits package, any treatment they need is free. However, you’ll typically be required to cover a deductible or make a co-payment before your insurance picks up the rest of the tab. For example, if you have to have a root canal that costs $1,500, you should expect to pay a small portion of that as a deductible or co-pay.  Depending on your particular benefits package, that could mean $50, $500 or any other amount specified in your policy.
• If you’re married, weigh your options. Compare your benefits package to your spouse’s to determine whether it’s most cost-effective to combine coverage or keep your policies separate. Find out if you’ll have to satisfy individual deductibles, family deductibles or both, and dig into other aspects of your policy. If you’re unsure about which is the smarter financial decision, consult an expert.

Misunderstanding your medical insurance benefits can end up costing you thousands down the road. Before you sign on the dotted line, be sure to ask questions and have a crystal clear understanding of what you can and can’t count on in terms of coverage.

Updating other types of coverage and planning for the future

If you’ve relocated for your job or made other big changes, you’ll likely need to keep your current home and auto insurance providers in the loop.  Here are just a few scenarios that could affect your existing coverage:

Your parents’ home and auto insurance policies no longer cover you.

If you lived at home or in a dorm during your college years, your parents’ home insurance coverage could have extended to you and your personal belongings. However, once you’re no longer on campus, you’re likely on your own when it comes to homeowners or renters insurance coverage. Your new address will have a great bearing on your premium – it will depend in part on how safe your neighborhood is and on how vulnerable it is to severe weather. Remember, neither homeowners nor renters insurance typically covers flooding, so you may need to add that if you live in a flood-prone area.

Additionally, if you’ve been using your parents’  address as your primary address, you were likely still eligible for auto insurance coverage under their policy. However, as soon as you move into your own permanent place, it’s time to get your own coverage.

You move out of state.

Each has its own Department of Insurance, which regulates home and auto insurance rates as well as coverage laws. If your new job takes you out of state, be prepared to purchase a new policy (after you get a new driver’s license in that state, and make sure you’re in compliance with any new regulations. For example, even a short move across the border between North and South Carolina comes with an average car insurance rate increase of nearly $200 plus new coverage requirements and added responsibilities such as annual car inspections. Consider the adjustments you could have to make if you’re planning a cross-country move.

You change your commute.

Even if you’re not moving out of state, your driving habits will likely change once you make the leap from college student to full-time employee. Notify your car insurance company if your commute time is lengthened, shortened or eliminated entirely by new access to public transportation. Your total mileage affects your risk of car accidents, which in turn has a big impact on how much you’ll pay for car insurance.

Plan for the future.

It’s never too early to consider the benefits of investing in life insurance coverage, even if you haven’t started a family yet. Ask whether your employer offers life insurance programs or research policies from independent providers. Depending on your particular situation and the type of policy you choose, it could cost you less than a dollar a day to ensure your family will be taken care of long after you’re gone. Work with an expert to determine the best life insurance options for you.

Diving into a mountain of paperwork on your first day is always daunting, regardless of whether this is your first job or your fifth. But regardless of how complicated and intimidating it all seems, taking the time to ask questions and understand all of your insurance policies and other finances now will really pay off for you and your family later.

This article was contributed by Carrie Van Brunt-Wiley, Editor of HomeownersInsurance.com. HomeownersInsurance.com is a leading consumer resource and insurance marketplace.