Basic insurance knowledge key as young adults head to college

A recent NAIC survey shows many Gen Z adults lack understanding of basic insurance terms like “copay,” “deductible,” and “out-of-network,” and only 21% have renters’ insurance—far fewer than those with mobile phone protection plans. With college students heading back to school, the North Carolina Department of Insurance urges them to consider renters’ insurance, which protects personal belongings and provides liability coverage, since landlords’ policies don’t cover tenants’ possessions. Policies are often affordable, and dorm residents may be covered under parents’ homeowners’ insurance. For guidance, call 855-408-1212 or visit www.ncdoi.gov.

Author: Insurance Commissioner Mike Causey

As college students prepare to head off for the fall semester, I’m reminded of a survey I read about a year ago regarding young adults’ grasp of basic insurance.

The survey, conducted by the National Association of Insurance Commissioners, found that many in Generation Z did not understand basic insurance terms, such as “copays” and “deductibles.”

Generation Z refers to those born from 1997 to 2012. They’re also known as Gen Z or Zoomers. Some Zoomers are still in high school while others are headed off to college or have just started their professional careers.

The survey found that only 21% of Gen Zers had renters’ insurance. A good bit more, 35%, had protection plans for their mobile phones.

Here are some other tidbits revealed in the survey: Only 19% knew what “out-of-network” meant; only 27% could define “deductible” and 29% knew the definition of “copay.”

In case you didn’t know: “Out-of-network” refers to doctors and facilities outside your health insurance HMO or PPO network which may result in you being charged the full price of a service or higher payment. “Deductible” is the amount you need to satisfy first before your insurance company will begin to cover the cost of your care. “Copay” is a designated amount that is due to the provider when you obtain services.

 A renters’ insurance policy is something that Gen Zers headed off to college or getting an apartment should consider. Many may not know that the landlord’s insurance policy will not cover the renter’s personal items – clothing, furniture, TV sets and other appliances, cookware, laptops and other belongings – if they are lost in a fire, storm or are stolen. Landlord policies only cover the building structure and other items belonging to the landlord.

A renters’ policy can shield you from liability for injury to others or damage to the rental property because of a fire, smoke or explosion.

Renters’ insurance policies often aren’t very expensive. Premiums may be $25 per month or less, depending on where you live and how much coverage you purchase. Higher amounts of coverage would cost more.

Students living in a dorm room may be covered under their parents’ homeowners’ insurance policy. It’s best to check with your insurance agent to understand your limitations and any additional coverage you may need.

If you need help with your insurance, feel free to call our toll-free number at the Department of Insurance at 855-408-1212 between 8 a.m. and 5 p.m. Monday through Friday to speak to a consumer expert. You may also visit our webpage at www.ncdoi.gov.