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Auto Insurance & Young Drivers: An Important Lesson

Harmony Miller, MPH

New drivers are almost never taught about the importance of auto insurance. Like personal finance, most high schools do not have a curriculum that covers this topic. Except the little that is required to know in order to pass a driver’s test, understanding auto insurance is not given priority when training new drivers.

Why is understanding auto insurance important?

First, understanding how insurance rates are set can save thousands of dollars in premiums.

More importantly, being properly insured can save you thousands of dollars in the event of a serious accident.

  • The insurance industry estimates that the average driver will be in 3-4 car accidents throughout the course of their life.
  • Drivers age 16 to 19 are three times more likely to crash than those 20 years or older.
  • Young people ages 15 to 24 make up 14% of the U.S. population – but comprise 28-30% of the total costs of motor vehicle accident injuries.

Given these staggering and frightening statistics, it is clear that young, inexperienced drivers need to be adequately insured – to protect other motorists as much as themselves. Obviously it is important that all drivers are adequately insured (and educated about the importance of insurance), but starting with new drivers is at least a step in the right direction.

Some states taking steps to help educate their citizens about insurance. Oregon’s Insurance Division has created a game that teaches users about auto insurance – and what the state laws are. The Ohio Insurance Institute has created games and lessons aimed at educating teen drivers about responsible driving and auto insurance. Sterling High School in Nebraska has even developed a required five-day economics/personal finance course called ‘Road Map to Buying Auto Insurance’ aimed at educating students about the importance of insurance and how it relates to financial planning skills.

Given that many insurance companies offer a ‘good student’ discount for maintaining good grades, perhaps additional discounts should be given to students that have completed coursework related to understanding the mechanics and importance of insurance.

Being an adult brings many freedoms that high school students look forward to. Teaching teenagers about the responsibilities that come with those freedoms is important for their long-term physical and financial health. Teaching teenagers the importance of being properly insured also helps protect the rest of us out on the road with them.

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