I used $ 23,000 of tenant insurance to pay off my student loans
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In May 2018, I graduated from Albany University – State University of New York with a bachelor’s degree and was ready to find a job. My first thought after passing the peak of undergraduate graduation was, “How am I going to pay off my student loans?” I am sure that is the case for many recent graduates.
When I started in the workforce, I was earning $ 35,000 and living at home with my grandparents. I lived as if none of the money I had earned or saved was mine, putting every penny available for my student loan debt.
I know some people say there is “good debt” including student loans, but I don’t have a financial safety net. My family support me with love but have struggled financially for years. I didn’t want to risk having this debt on my head forever.
The accident that changed my life
Meanwhile, my three-year-old boyfriend moved to Manhattan and rented a tiny three-bedroom, two-bathroom apartment with a few friends. I was going to visit every other weekend and enjoy the city on a budget, always extremely careful with the money I spent.
In September 2019, on a Sunday, my boyfriend and I returned to his apartment to have us cleaned. Apparently my boyfriend’s shower door had been waterproof for weeks. When I walked in it had opened easily, but then I had to push it hard to close it. I had both hands on the shower door when the bottom wheel came off and the shower door shattered.
I opened both hands wide.
After receiving stitches and x-rays, seeing a neurologist, meeting with an occupational therapist, and attending several follow-up appointments, I left with nerve damage to my right thumb and permanent scarring.
Lucky for me, my boyfriend had tenant insurance through Lemonade. As soon as we got back from the hospital I pushed my boyfriend to make a claim – without it my medical bills would have been sky-high. In the end, after several months of doctor’s appointments and negotiations, I settled with Lemonade for $ 23,250, on top of what they paid for my medical bills.
It was just a few hundred dollars less than I owed the rest of my student loans. This money has changed my life.
I’ve built my net worth since
I immediately used my settlement money to pay off my student loans in full. After that, I started putting all my available money into savings and investments to build my net worth.
I have since been able to save about $ 50,000. I opened a 401 (k) individual retirement account and a Roth account and now I can put my money aside for the future – something I didn’t see myself doing for 10 years or more. My goal is to maximize my Roth IRA each year so that I can have a chance to retire.
Because I am no longer in debt, the idea of ââbuying a house is just a dream. I can save for my dream honeymoon. I don’t have to worry about credit card debt. My credit score is now at 793 and is only going up.
In the end, thanks to this settlement, I was able to free myself from my debts at 25 years old. All the pain and suffering, along with the permanent scarring and nerve damage, was worth freeing from student loan debt.
Editor’s Note: This post has been updated to clarify that the author did not realize the shower door was sticky before the accident.