Insurance Mistakes I Made in My Twenties – And How You Can Avoid Them

Insurance Mistakes I Made in My Twenties – And How You Can Avoid Them

When I look back at my twenties, I see a time of ambition, spontaneity, and, admittedly, a lot of financial naivety. One area I completely mishandled was insurance—a subject I barely understood yet one that silently shaped many of my financial setbacks. In this article, I’m going to break down the major insurance mistakes I made in my twenties, the lessons I painfully learned, and how you can avoid repeating them.

1. Assuming I Didn’t Need Health Insurance

Like many twenty-somethings, I thought I was invincible. I skipped buying health insurance because I rarely got sick. That was until a late-night ER visit for a kidney stone cost me more than three months’ rent.

What You Should Do Instead:

Even if you're healthy, unexpected medical emergencies can drain your finances. Look for affordable high-deductible health plans (HDHP) with Health Savings Accounts (HSAs) for tax benefits and emergency coverage.

2. Opting Out of Renter’s Insurance

I moved apartments four times in my twenties and never once bought renter’s insurance. When a pipe burst in one unit and ruined my electronics, I realized I was on my own financially.

Lesson Learned:

Renter’s insurance can cost less than $15 a month and covers everything from theft to water damage. Don’t make the same mistake I did—protect your stuff.

3. Choosing the Cheapest Auto Insurance Plan

I drove an old used car, so I figured I only needed the minimum legal coverage. But when I was in a minor accident and had no collision coverage, I had to pay for my own repairs—plus legal fees from a lawsuit.

Tip:

Don't just look at the monthly premium. Make sure your coverage limits actually protect you. Understand terms like comprehensive, collision, uninsured motorist, and liability coverage.

🔗 Useful read: NerdWallet’s Car Insurance Comparison Guide

4. Not Getting Life Insurance While It Was Cheap

In my twenties, life insurance seemed like something for people with kids and mortgages. But the rates were lowest back then! Now in my thirties, I pay almost double for the same policy.

Pro Tip:

Even a basic term life insurance policy is affordable in your twenties and can lock in low premiums. It’s also a powerful financial tool if you have student debt or family depending on your income.

5. Ignoring Disability Insurance

What if you got injured and couldn't work for months? That happened to me after a sports injury. No work meant no pay. I didn't have disability insurance, and it wrecked my emergency fund.

Better Approach:

Disability insurance protects your income, which is your most important asset. Many employers offer short- and long-term disability plans—opt in, and if they don’t, shop for individual coverage.

6. Failing to Reassess My Policies

One of my biggest mistakes was “set it and forget it.” I didn’t adjust my coverage even as I started earning more, moved cities, or changed jobs. As a result, I was overpaying for some policies and under-covered in others.

What You Should Do:

Set a reminder every 6-12 months to review your insurance policies. Look for multi-policy discounts, coverage gaps, or better deals on the market.

Don't Let Insurance Be an Afterthought

The insurance mistakes I made in my twenties weren’t due to laziness, but ignorance. No one teaches you how to handle this stuff—but you can start today. Whether it’s reviewing your current policies, talking to a licensed agent, or just asking the right questions, it’s never too early to take control of your financial future.

The Hidden Costs of Skipping Insurance: True Stories That Changed My Perspective

When you’re young, skipping insurance can feel like saving money. No monthly premiums, no paperwork, no worries—until something goes wrong. I used to think insurance was optional, even wasteful. That belief cost me thousands, ruined plans, and taught me lessons I can’t forget.

This article dives into real-life consequences of living without insurance and why skipping coverage often leads to bigger financial and emotional losses than you might imagine.

1. The Night My Friend’s Apartment Burned Down – And He Had No Renter’s Insurance

It was a summer night. A faulty outlet in the next-door unit caused a fire that spread quickly. My friend Jacob lost everything—his laptop, clothes, even irreplaceable photos. Worst part? He didn’t have renter’s insurance.

He thought the landlord’s insurance would cover his stuff. It didn’t.

Lesson:

Renter’s insurance is incredibly affordable, often less than $180 per year, and covers fire, theft, and liability. Don't assume the building’s policy protects your belongings—it doesn’t.

✅ Resource: Why Every Renter Needs Insurance – Investopedia

2. I Skipped Travel Insurance – Then I Broke My Leg Abroad

During a trip to Thailand, I took a scooter down a mountain trail. One wrong turn, a hard fall, and a broken leg. I ended up in a rural hospital, paying for X-rays, medication, and surgery—out of pocket.

The worst part? A $40 travel insurance policy would’ve covered every cent.

Takeaway:

If you're traveling, always get comprehensive travel insurance. It protects you from medical costs, cancellations, lost luggage, and more.

3. My Cousin’s Car Crash Without Full Coverage

My cousin Maria had basic liability-only car insurance. It saved her money monthly, but when she totaled her car on icy roads, she found out it didn’t cover her vehicle—just the other party’s. Her car was worth $8,000. She got nothing.

Tip:

If your car is worth more than $4,000, it’s often worth having comprehensive and collision coverage, even if it's not legally required.

4. A Sudden Illness With No Health Coverage

My coworker Sarah was freelancing and didn’t buy health insurance to save money. Then she was diagnosed with appendicitis and needed emergency surgery. The bill? $32,000.

She had no coverage and ended up with medical debt that affected her credit for years.

What to Do Instead:

Even a basic catastrophic health plan is better than none. You’ll pay lower premiums and still get coverage for emergencies.

💡 Check: HealthCare.gov - Low-Cost Plans

5. The Emotional Toll of Being Unprotected

Beyond money, skipping insurance can take a serious emotional toll. The stress, guilt, and helplessness of being unprepared when disaster strikes is something you don’t forget.

After these experiences—some my own, some from friends—I now see insurance not as a burden, but as a safety net.

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