Teaching high school students about car insurance is an important life skill that will help prepare them for financial responsibility when they start driving. Having car insurance is required by law and understanding the different types of coverage, how premiums are calculated, and how to comparison shop for the best rate are all key lessons. Designing engaging and interactive lesson plans can help students retain the information better as well. Here are some ideas for car insurance lesson plans tailored for high school students.
Types of Car Insurance Coverage
One of the first lessons should focus on explaining the main types of car insurance coverage. Go over what each type covers and key terminology.
- Liability insurance – This covers damage that the policyholder causes to someone else. It has two components: bodily injury liability which covers medical bills to others and property damage liability which covers damage to another person’s vehicle or property. Recommended minimum is $100,000 per person and $300,000 per accident for bodily injury, and $50,000 for property damage.
- Collision insurance – This covers damage to the policyholder’s vehicle from an accident, regardless of who is at fault. It has a deductible amount the policyholder must pay before insurance covers the remaining damage costs.
- Comprehensive insurance – This covers non-collision damage to the vehicle like theft, vandalism, fire, flood, windstorm, and hail. It also has a deductible.
- Uninsured/Underinsured motorist coverage – This covers injuries to the policyholder if they are hit by a driver with no insurance or not enough coverage.
- Personal Injury Protection (PIP) – This covers medical expenses for injuries to the policyholder and passengers regardless of who is at fault. Offered in some states.
Factors That Affect Car Insurance Premiums
Another key lesson is explaining what goes into determining the insurance premium amount. Have students research average car insurance rates for certain driver profiles.
- Age – Teen drivers under 25 pay the most, adults 25-65 pay moderate premiums, seniors over 65 can get discounts.
- Gender – Statistically males pay more than females in the same age group.
- Marital status – Married drivers tend to pay less than single drivers.
- Location – Insurance rates are higher in urban areas and certain states like Michigan or Louisiana.
- Driving record – Drivers with moving violations, accidents, or DUIs pay much higher premiums.
- Type of vehicle – Sports cars, luxury vehicles, and SUVs cost more to insure than basic sedans or minivans.
- Mileage – Drivers with longer commutes and high annual mileage have higher premiums.
- Credit score – In most states insurance companies factor in the driver’s credit-based insurance score. Good credit means lower rates.
How to Shop for the Best Car Insurance Rates
When students are close to getting their driver’s license, go over ways they can save money by shopping around for the best car insurance rates.
- Compare quotes from different insurance companies. Rates vary widely between insurers for the same driver profile.
- Consider bundling home and auto policies with the same provider for a multi-policy discount.
- Ask about discounts for good student grades, taking a defensive driver course, having multiple cars on a policy, pay-in-full discounts, and more.
- Raise deductibles to lower premiums but have savings to cover the out-of-pocket costs if an accident occurs.
- Drop collision and comprehensive coverage on older cars worth less than 10 times the premium.
- Compare rates every few years as new insurers enter the market and old ones adjust rates.
Using Technology to Teach Car Insurance Concepts
Leverage technology to engage students and promote financial literacy on car insurance:
- Have students research quotes online using insurer websites and compare sites like The Zebra or Gabi. They can see firsthand how factors affect premium pricing.
- Use car insurance calculator apps to input sample driver profiles and see the estimated insurance costs.
- Watch explanatory car insurance videos on YouTube from reputable sources. Videos make topics more visual and memorable.
- Play interactive car insurance quiz games or activities through sites like EverFi and EVERFI Instructional Modules.
Making car insurance concepts relatable and having students get hands-on with researching policies and rates will prepare them to confidently navigate insurance decisions in the years ahead. Utilizing a variety of teaching methods and technologies engages them in the learning process.
References
- https://www.nerdwallet.com/article/insurance/minimum-car-insurance-requirements
- https://www.insurance.com/auto-insurance/insurance-rate-factors.html
- https://everfi.com/blog/k-12/4-ways-to-lesson-plan-for-back-to-school-with-everfi/
