The car insurance drop
Insurers price drivers under 25 as a high-risk group, and the premium usually steps down each year from the late teens, with a more visible drop around 25. The reduction arrives at renewal, not on your birthday, and your current company will not volunteer its best price. Get quotes from at least three insurers a month before the policy renews, using identical coverage.
Fix the policy itself while you are there. State minimum liability limits are far too low for a serious crash, and limits of 100/300/100, meaning $100,000 per person, $300,000 per accident and $100,000 for property, are a sensible floor. If your emergency fund can absorb it, raising the collision deductible from $500 to $1,000 cuts the premium noticeably. A clean record counts for more than age, since most tickets and at-fault accidents affect rates for three to five years. If you keep your own car at your own address, leave a parent's policy for your own, because a misstated address is grounds for denying a claim.
Rental car companies also drop the daily young-driver fee at 25.
The health insurance clock
You have one year left on a parent's health plan. Find out now whether that plan ends coverage on your 26th birthday, at the end of that month or at the end of the year, and when your own employer's open enrollment falls.
The money checkpoints
- You should be able to cover three months of essential expenses from savings.
- You should be collecting the whole employer match in a workplace retirement plan, and working toward saving 15 percent of gross pay.
- You should have read your three credit reports, which are free at annualcreditreport.com, and recognize every account on them.
- You should know the interest rate on every debt and be paying down the highest first.
- You should carry renters insurance and, if your employer offers it, long-term disability coverage, because your future earnings are your largest asset.
Life insurance stays off the list unless someone depends on your income.
One deadline that closes
Men who have not registered with Selective Service can do so only until their 26th birthday. After that the failure is permanent, and it can bar federal employment, some state benefits and, for immigrants, naturalization. Verify yours on the agency's website.
Tip Ask each insurer about discounts for paying the premium in full, bundling a renters policy and completing a defensive driving course. Stacked together, they can take a meaningful slice off the quote.
