Coverage 101: How to Teach a Child About Insurance

Mar 1, 2023 | Auto Insurance, Commercial Insurance, Home Insurance, Tips, Umbrella Insurance

Unfortunately, high schools and colleges don’t offer adulting classes, where students learn the basics of taxes, banking, and insurance. And parents often neglect to teach this essential information. As a result, young adults strike out on their own without even knowing the definition of an insurance premium. If you’re a parent, don’t let that happen to your kid. Instead, follow these suggestions on how to teach a child about insurance.


Start with the basics. What does insurance do?


Break the definition of insurance into simple terms—especially for a younger child. For example, you can simply say it will cover the cost of your home, car, etc., if an event, such as a storm or fire, causes damage. This explanation will give your son or daughter an idea of what insurance is and does and how it can help the family.


In fact, Hibbs’ Vice President Jennifer Lamphere says the insurance conversation made her daughter feel safe. Her child was concerned about their house after a tornado decimated nearby towns. So, Jennifer told her that an insurance policy was protecting their home, and they could rebuild if a storm ever damaged it. She says the discussion eased the girl’s fears.


Go over insurance responsibilities with a teen.


Discuss insurance in more detail with a teenager. Explain that as an insured person, you must pay monthly premiums. Then after an incident, you must pay a deductible before coverage kicks in. Ensure your child has a basic understanding of their insurance responsibilities before they move out of your home.


Talk about the different types of insurance available.


Next, discuss what insurance can cover, such as homes, cars, boats, dirt bikes, motorcycles, RVs, businesses, and more. And remember to explain life insurance and how it can help care for your child if anything happens to you or your partner. Use this conversation to make them feel secure.


If your child is older and getting ready for college or vocational school, talk about renter’s insurance and the personal items it can cover (such as a laptop).


Discuss how to get good rates.


A teen should know how to keep their premiums down—especially if they’re starting to drive. Explain that insurance claims can cause rates to rise, so insist that your child drives carefully to stay safe and keep auto insurance premiums affordable. (You can also mention that carriers often give discounts for clean driving records and good grades.)


Additionally, you can talk about ways to save on other types of insurance, like installing home safety features for lower home insurance premiums. Of course, your child won’t need that information for a while, but it’s a good idea to let them know discounts exist.


If you have any questions regarding how to teach a child about insurance, contact a Hibbs agent. We’re parents, too, and we know how important it is to prepare your kids for the world.

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