Grade 9-12

Choosing Sides: Which Drivers Would You Insure?

Time: 60 mins,
Updated: April 25 2024,


Students will be able to:

  • Explain how insurance markets pool the risk associated with individual drivers.

In this personal finance lesson, students will participate in insurance pools to learn how car insurance markets deal with risks.



Before the game begins, review some important terms with the students. Write the questions below on the board. Pose and discuss the following questions:

  1. How do insurance companies come up with the money to pay for fixing the damage of an auto accident?
  2. What kinds of drivers are the least likely to require big payouts by insurers?
  3. What kinds of drivers are the most likely to require big payouts by insurers?
  4. Why would an insurance company like drivers with higher credit scores?


  1. From selling insurance; that is, charging premiums.
  2. Least likely, those responsible drivers of practical vehicles.
  3. Most likely, irresponsible drivers who do not obey the law.
  4. They are more likely to pay their bills on time, and possibly more responsible drivers. Someone’s credit score is a number between 300 and 850 that indicates a borrower’s ability to repay a loan. Higher numbers are better.


Print and distribute a copy of the Insurance Pools handout to each student. Instruct students to read the game outline. Give them 2 minutes to read through the instructions quietly.

Explain that in this game, they will be divided into groups called ‘insurance pools.’ Each pool will pick which of its drivers to insure. In the first round, the pool receives $2,000 from each driver that the pool decides to insure. Then, if the driver has an ‘accident’ determined by the roll of the dice, the insurer must pay the costs.

Group Activity

Print and cut the Auto Game Cards. Pick an example Driver Card, read off the information on and ask: Is this a risky driver? Give each of the students a Driver Card, have them write their name in the blank and fold the card along the dotted line. Explain that the Driver Card handout has two sides. The front side lists information about each driver’s riskiness. It also includes $2,000 to pay for insurance in the first round. The back side has additional information that the insurance pools don’t know yet.

Form groups of four to ten students (about six is best). Explain that each group is now an insurance pool deciding which drivers to insure. The pool would like to help everyone but would prefer not to lose money. Have groups evaluate the front of each Driver Card and come up with a “yes” or “no” decision on offering insurance. Continue until a decision has been made on each driver.

When all decisions have been made, explain that the pools will now find out their profits. Even safe drivers sometimes have accidents; risky drivers may go some time without an accident or loss. To represent the element of chance, each driver will roll two dice. The outcome shows the claim that the insurance company must pay on the back of the Driver Card. For example, a roll of “2” represents perfectly safe driving with no accidents, and a loss of $0. Have the pools determine profits on each driver, according to the roll of the dice and the formula on the card:
Premium – Loss = Insurance Profit.

Individual Activity

Once the game is complete, have students go back to their seats. Instruct students to give a thumbs up for ‘yes’ and a thumbs down for ‘no.’ Lead students through a discussion using the Teacher Discussion for Insurance Pools.


Write the following questions on the board or display them on a screen. Have students circle the best answer on a piece of paper and submit their answers before they leave the class.

  1. A “premium” is defined as
    a. the extra amount that unsafe drivers must pay to get insurance.
    b. the ratio of gains to losses at an insurance company.
    c. the amount of money an insurance company makes after subtracting losses.
    d. money used to buy insurance. (correct)
  2. Where do insurance companies get the money to pay for the damage of automobile accidents?
    a. the U.S. government.
    b. money paid in by their insured drivers. (correct)
    c. the insurance commission in each state.
    d. gasoline taxes.
  3. When would safe drivers be penalized for the accidents of riskier drivers?
    a. when insurance rates go down.
    b. when safe drivers seek out reliable cars to reduce the costs of breakdowns.
    c. when premiums are required to be equal across all risk categories. (correct)
    d. when insurance companies make ordinary profits.


Activity 1

Play an additional round of the game. In this optional round, the pools again decide who gets insurance, but this time with two differences:

  1. Your pools may as a group decide to charge $1000, $2000, $3000, $4000 or $5000 to each insured driver.
  2. Each driver may decide to accept the offer of insurance at the stated price or to decline it and take a chance on not having an accident.

Now roll the dice again and note who “won” and who “lost” on each roll of the dice. Ask the following questions:

  1. Who “won” in this round?
  2. Who “lost” in this round?

Activity 2

Play an additional round of the game. In this final optional round, the pools again decide who gets insurance:

  1. As in Optional Round Two, the pools may as a group decide to charge $1000, $2000, $3000, $4000 or $5000 to each insured driver
  2. As in Optional Round Two, each driver may decide to accept the offer of insurance at the stated price or to decline it and take a chance on not having an accident.
  3. Now this final difference in Round Three only: When prompted by the teacher, members of your group may request to be taken in by any other insurance pool for $1000, $2000, $3000, $4000 or $5000. That other pool may make a deal or decline. When all groups have had a chance to make deals with other pools, the dice are rolled again for each driver.
Personal Finance