Who Knew Insurance Could Be a Teaching Tool?

iNsuranceThis year the kids’ high school gave us the perfect opportunity to teach them about a new financial concept – insurance.

At their school each kid is issued an iPad that is theirs to keep for their entire school career.  The kids are free to add apps to it, use it outside of school and pretty much do with it what they’d like, with a few exceptions:

  • It must be fully charged and present in all classes
  • All apps must be parent approved
  • iPads can be searched at any time for inappropriate content
  • Damage is the responsibility of the family to which the kid belongs

After a one-year trial period that went amazingly well, this year the school expanded the program to include all upper grades at all schools.  We love that the school recognized that the kids need to take responsibility for their devices and that school time won’t be spent micromanaging student accounts.  It’s also pretty amazing to see how much e-textbooks cut down on bulk in the kids backpacks!

Teaching Kids About Insurance

Since the school recognizes that the cost to repair or replace such an expensive piece of equipment is not insignificant, this year they offered an optional insurance policy.  The kids brought home a piece of paper asking if we wanted to opt in for full-replacement coverage, damage repair, or chose to not have the device covered at all.  The full replacement plan was $60.  When the boys brought it to us to sign, we asked them if they were planning to take good care of the device.  They assured us that they were.

“Well,” we said, “if you are planning to take good care of it, then we shouldn’t need the insurance, right?”

That caused a kerfuffle.  “But what if something happens to it?”  they asked.

We explained to them how insurance worked and that since we, as parents, would not be laying eyes on the device the majority of the time, there was really no reason for us to be involved in worrying about whether or not it would get lost or damaged.  If they were worried, they could pay for the insurance.  If they were pretty sure they’d be taking good care of the iPad, they could opt out of the insurance and take the risk that if something happened, they’d have to pay for the damage or replacement cost out of pocket. We would support them in whatever choice they made and sign the form accordingly.

Not surprisingly, neither of them chose the insurance.  Time will tell if they made the right choice, but in the short term, their iPads have been amazingly well cared for and they have had their first experience with a new financial tool.

What do you think?  Should parents pay for insurance on devices their kids use?

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