The High School Financial Planning Program® (HSFPP) will be retiring on July 31, 2021. Learn more about this decision.

Insurance: Protect What You Have

Lesson 6-4 Auto Accidents Happen

Driving a car involves taking on financial responsibility to cover property or physical damage caused by the driver’s actions. Knowing the basics about auto insurance coverage and what to do after an accident can help to minimize stress and out-of-pocket costs.

What You’ll LearnDiscover how auto insurance works and what to do if ever involved in an auto accident.

Taking it Home

  • Read through an insurance policy that covers a family vehicle so you are familiar with what is covered and not covered. Did you discover any surprises?
  • Discuss the family rules for driving the family vehicle. Use the template from to create a Teen Driver Contract.

Learn More

  • Check with your state Department of Motor Vehicles (aka DMV) to become familiar with any state requirements for minimum auto insurance coverage, proof of insurance and accident reporting.
  • Explore driving and vehicle accident statistics, in particular look for information about young drivers. Find stats and tips for safe driving provided by the Insurance Information Institute, the National Association of Insurance Commissioners, (, and auto insurance providers.

Related Resources

Talking Points for Parents

While your teen is learning about auto insurance, consider ways to reinforce learning from home.

  • Share an experience you had dealing with an auto accident and the resulting costs and inconveniences. Describe what was involved for the insurance claim.
  • Arrange for your teen driver to meet with your auto insurance agent. Ask the agent about how your teen driver impacts the cost of your auto insurance and factors that can lower the premium.
  • Have a discussion with your teen driver about the rights and responsibilities of driving a family vehicle and any responsibilities to pay for gas, insurance or maintenance.