Did you know that insurance companies hire actuaries to statistically decide how risky you are based on traits such as your education, zip code, gender, home ownership, driving record, and - in some cases - medical history? They use statistical data to determine which traits predict the least possibility of accidents. To learn more about insurance, check out the Financing Your Future My Florida CFO activities.
So, what should you look for in an insurance company? Talk to some friends and brainstorm what are important traits to look for in an insurance company. Share your groups ideas with the class. Do all teams have the same lists? Is it acceptable for different people to look for different things in their insurance companies? How can auto insurance help you? What does it mean to have a high deductible or a low deductible? What are the advantages and disadvantages of each? What is the most appropriate choice for you as a teen? What about your parents? Grandparents? How did you make these decisions? What does the government have to say about automobile insurance? Is there help for picking the right insurance company?
Read the attached article about gender and car insurance rates.
What do you think? What do you think would happen if you were a safe driver and your insurance rates went up due to inexperienced or unsafe drivers?
What can you do to not be as risky to your insurance company? How soon can you implement these choices into your lifestyle?
Now it's time for you to use the data. Check out the data collected by the Insurance Information Institute. If you owned an insurance company, what decisions would you make based on the data?
Extension: Draw a cartoon strip with at least 5 bubbles. Write about car insurance and illuminate what is important to the consumer.
Check out the student guide to use with this article.
Florida Literacy Standards:
SS.912.FL.6.2: Analyze how judgment regarding risky events is subject to errors because people tend to overestimate the probability of infrequent events, often because they’ve heard of or seen a recent example.
SS.912.FL.6.3: Describe why people choose different amounts of insurance coverage based on their willingness to accept risk, as well as their occupation, lifestyle, age, financial profile, and the price of insurance.
SS.912.FL.6.4: Explain that people may be required by governments or by certain types of contracts (e.g., home mortgages) to purchase some types of insurance.
SS.912.FL.6.5: Describe how an insurance contract can increase the probability or size of a potential loss because having the insurance results in the person taking more risks, and that policy features such as deductibles and copayments are cost-sharing features that encourage the policyholder to take steps to reduce the potential size of a loss (claim).
SS.912.FL.6.6: Explain that people can lower insurance premiums by behaving in ways that show they pose a lower risk.
Created by Deborah Kozdras and Brittany Sampson