Insurance Is the Decision Now

Here is the parents’ script for a twenty-four-year-old in Charleston: buy a place, finance a car, take the employer health plan. Here is what the insurance alone looks like, before a single dollar of mortgage, car payment, or repair.

Call it roughly $8,900 a year for insurance on the parents’ script, against roughly $150 on the renter-and-rideshare script. That gap is close to $44,000 over five years before it earns a dime. Invested instead, it is the start of the thing your parents were actually trying to buy with the house: freedom.

And the difference is bigger than the chart. Every one of those policies is attached to an asset you had to borrow for. The insurance is the part that never ends and never builds equity.

Home

Nationally, the GAO says home insurance roughly tracked inflation from 2019 to 2024: about 27 percent in raw dollars, about 3 percent after inflation. But in southern coastal areas at high risk of wind damage, premiums rose 25 percent or more after inflation. One national brokerage, Rate Insurance, reports premiums across its own book up 107.6 percent since 2019. Charleston’s average now runs about $1,300 a year above the national average, according to Insure.com. The coast is being repriced, and you would be buying into the repricing.

Flood

Your homeowners policy does not cover flood. That is a separate policy, and in Charleston it is often not optional: federal law requires flood insurance on loans from federally regulated lenders, and loans sold to Fannie Mae or Freddie Mac, for buildings in a Special Flood Hazard Area. The National Flood Insurance Program is moving every policy to its full-risk price, and by statute most policies can rise up to 18 percent a year until they get there. GAO estimated it would take until 2037 for 95 percent of current policies to arrive.

Auto

I will be honest about auto, because it is the one that has cooled. Insurify reports full-coverage premiums up 43 percent since 2021, then down 6 percent in 2025, and roughly flat into 2026. So the increase has paused. But it paused at a level 43 percent higher than it was four years ago, and a twenty-four-year-old in South Carolina still pays close to $2,900 a year for full coverage. If you finance the car, the lender requires the full coverage. AAA puts the total cost of owning and operating a new car at $12,863 a year. Insurance is one line of that; it is the line that follows you even when the car is parked.

Health

This is the steepest line in the next five years. Marsh, the firm formerly known as Mercer, projects employer health benefit costs per employee will rise 8.2 percent in 2027, the largest increase since 2003, and would rise 11 percent if employers changed nothing. Aon projects 9.5 percent before plan changes, pushing average cost above $19,000 per employee. Marsh also found about two-thirds of large employers expect to raise employees’ share of premiums next year. On the individual market, the enhanced ACA tax credits expired at the end of 2025. KFF reports average Marketplace deductibles jumped from $2,759 to $3,786 in one year, and, citing Wakely Consulting estimates, average premium payments up 58 percent.

Your parents’ payroll deduction was a rounding error. Yours is a strategic decision.

The most dangerous insurance is the insurance you do not see on a policy with your name on it. It is folded into another payment, so it never gets decided. It just gets paid.

1. HOA dues

   If you buy a condo or townhome, the association carries a master policy on the building, and your dues pay for it. When that premium jumps, your dues jump, or you get a special assessment. Realtor.com found 43.6 percent of listings carried HOA fees in 2025, up from 34.3 percent in 2019, and its senior economist names rising insurance costs as a main driver of rising dues. You can carry your own condo policy and still be paying for the building’s policy inside the HOA line.

2. Mortgage escrow

   Your lender collects homeowners and flood premiums monthly and pays them for you. When the premium rises, the escrow analysis raises your mortgage payment. Nothing about your loan changed. The insurance did.

3. Private mortgage insurance

   Put down less than 20 percent on a conventional loan and you usually pay PMI. Read that carefully: it is insurance you pay for that protects the lender, not you.

4. Lender-required coverage

   Flood on a mortgage in a flood zone. Full coverage on a financed car. Gap coverage offered at the dealership. Each one is a requirement of the debt, not a choice you made.

Notice the pattern. Almost all of the hidden insurance arrives because you borrowed. Keep the debt off, and most of the insurance never shows up.

Rent, because of insurance

Renting moves the building, the roof, the flood policy, the HOA master policy, and the escrow increases onto the landlord’s books. What is left for you is a renter’s policy, which runs about $150 to $250 a year nationally and covers your belongings and your liability. That is the insurance version of keeping your needs low.

Ride-share, because of insurance

No car, no auto policy, no lender requiring full coverage, no premium that follows you when the car sits in the lot. The ride has a price, but the platform carries the commercial policy during the trip, and you only pay when you move.

Health: the absolute minimum, and invest the rest

This is the one where I go furthest, so I want to be precise. My advice is the absolute minimum, and some of my students choose none. The goal is to stop paying for coverage you are statistically unlikely to use at twenty-four and put that money to work.

For most of my students, the absolute minimum is better than it has ever been:

• Under 26: You can stay on a parent’s plan. On a Marketplace plan, that runs through December 31 of the year you turn 26.
• Under 30: You qualify for a catastrophic plan automatically. In 2026 its deductible is $10,600, which is also its out-of-pocket ceiling for in-network care. It exists for the bad year, not the ordinary one.
• New in 2026: Under the One Big Beautiful Bill Act, catastrophic and bronze plans now count as HSA-eligible. You can put up to $4,400 a year into a Health Savings Account, deduct it, invest it, and never pay tax on it if it is spent on medical care. That is opting out of expensive insurance and investing, with the tax code on your side.

Already true

Insurance costs on the coast have outrun inflation; health costs are about to post their fifth straight year of elevated increases; and most insurance a young person pays is attached to debt.

What has to happen

You have to actually invest the difference. Skipping the house and the car and then spending the $8,900 is not this strategy. It is just spending.

Where I am probably wrong

If you go all the way to zero on health insurance, you are the insurance company. A catastrophic plan puts a ceiling on your worst year. No plan means no ceiling, and one bad week can erase years of what you invested. That is why my advice is the minimum and not nothing. If you choose nothing, choose it knowing that, and don’t drive, ride, or live in a way that makes the bad week likely.

Your parents are not wrong about what they want for you. They want you safe and free. The house was how their generation bought that. For yours, on this coast, over the next five years, the house comes with an insurance bill that rises every year you own it, and most of that bill is invisible until it arrives.

Keep your needs low. Treat insurance as its own decision. And let your first employer be your first customer.

Buy the house later, when you are buying it with the money you invested, from a position of strength, and you can decide the insurance with your eyes open.

I am not a financial or insurance advisor. This is how I think about it and what I tell my students. Your situation is yours; get a real quote for a real address before you decide anything.