The Scene

you pack into your auto, including
work stuff, gym bag and take-home
Chinese. But what many young
adults don't know is that homeown-
er's/renter's insurance is the key to
protecting all that "stuff." It's not
expensive to have these policies, so
you get a lot of protection for a little
expenditure.
A basic renter's policy,
which goes by the formal
name of Tenant Home-
owner's Policy, covers
personal belongings. It
can cost as little as $150
per year, depending on
the dollar value of the
items you are insuring. Jim Lolas,
an owner of L & G Insur-
ance Services Inc., in
Farmington Hills, says
that most young adults
sign on for a renter's
insurance policy to protect
their computers and sound
systems.
That small fee covers
thousands of dollars worth
of equipment. Basic policies
have a deductible, which you
pay in case of theft; they also
cover fire and storm damage.
Like its name, homeowner's insur-
ance protects a person's home. This
means that the policy offers all of the
benefits of a renter's policy, in addi-
tion to insurance for the actual struc-
ture. If you own a $150,000 home,
you'll pay around $450 per yea'r for
an average policy.
Renter's and homeowner's insur-
ance alike allow 10 percent of per-
sonal property coverage to extend
outside of the home, i.e. the car.
That means that if you spend a few
hours on a Sunday shopping at the
mall, put your new purchases in the
trunk, and head back in for round
two, the items in the trunk are cov-
ered in case of theft. Really.
"The attitude [among young
adults} is that 'I really don't need it,"'
says Lolas. Most people think, "it
won't happen to me." Only three out
of 10 young adults surveyed carry
renter's insurance. Ari Goode, a
Chicago attorney, just took out a
renter's policy; upon returning home
from work one evening, he found
that his laser printer had been stolen.
"I got burned," he says. "And then
I woke up."
Coverage is minimal, even for
expensive items such as furs, art and
jewelry. For these items, agents pro-
vide Special Property Floaters, or

3/13
1998

74

add-ons to an existing policy. If, for
example, a young woman becomes
engaged, she can acquire an add-on
to protect the value of her diamond
ring.
Everyone knows about buying car
insurance; in Michigan, it's mandat-
ed by law. And like any other item in
a capitalistic society, there's a bevy of
policies from which to choose.
"The thing to
remember is that car
insurance is a competi-
tive market," says Lolas.
"The right coverage is the
bottom line."

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Lolas' agency recommends that
young adults carry at least $300,000
in bodily injury liability. Car insur-
ance contains so many variables —
age of driver, type of car, driving
record, zip code and amount of
deductible, to name a few — that a
standard cost is difficult to find.
When looking for car insurance,
shop around for good pricing and
coverage.
Newcomers to the job market,
young adults must also choose a
health insurance policy. Fortunately,
most employers have already done
the research, and you can sign on to
their plan.
But in case they haven't, here's
what you need to know: There are
three basic health insurance plans.
The first, a traditional policy, allows
people to visit any doctor they
choose and pay 20 percent of the
doctor bill plus a standard
deductible.
Another option, known as a
PPO, operates within a network of
doctors. If you visit a doctor that
operates within the network, the
appointment is covered; all you pay
is $5 or $10 per visit. But if you go

outside the network to a non-partici-
pating doctor, you pay 20 percent of
the bill, just as in the traditional
plan.
According to Jason A. Klein, a
broker sales consultant for SelectCare
in Troy, PPOs are popular because
they demand lower out-of-pocket
costs than traditional plans.
Six of 10 young adults surveyed
carry a PPO. They like
the option of working
both within and out of
the network, should they
choose. They look at it
as having no limit to the
care they can receive.
"Young people do not
get sick often," says Phil
Gold, a 28-year-old
computer systems expert
in Detroit. "With a
PPO, I can choose from
a large network of doc-
tors — if I need care.
And my policy is inexpensive."
"The best option for young
adults, though, is an HMO," says
Klein. "This is the lowest out-of-
pocket cost to an employee, with the
highest level of benefits."
What Klein is talking about is the
100-percent coverage offered by an
HMO. This plan operates on a refer-
- ral system, where patients must be
referred to a primary care physician
within a large network of doctors.
SelectCare allows participants to
choose from 1,400 primary care
physicians, 2,500 specialists and 34
hospitals across
southeastern
Michigan.
However,
plenty of
people are
griping
about
HMOs nowa-
days. The
biggest

complaint is competition — you
must see a doctor from a limited
pool of phys,icians who participate,
and often they are booked up. And if
you want to see a specialist — from
allergist to therapist — you must
first see your primary care physician
for a referral. Every time.
HMOs cover preventive care and
are community-rated. This means
that if a patient visits
the doctor often, rates
do not increase. With
other plans, rates will
rise as medical atten-
tion increases.
"Make sure the
HMO is high-quality,"
says Klein. The Nation-
al Committee for Qual-
ity Assurance, from
which SelectCare has a
three-year accredita-
tion, screens and rates
HMOs across the
country; patients can inquire about
the quality of care for the price they
pay.
And what is that cost? For a single
person, the average is about $130 per
month. The employer may choose to
cover a percentage of that amount,
and the rest is the responsibility of
the employee.
As age increases, so does responsi-
bility. It's important to know
what is out there for our protec-
tion, so we can remain as safe and
comfortable as possible.
Insurance is a cost of living. It is
also an investment in the
future. ❑

Young
adults
need
renter's
insurance.