How many adults not in the insurance industry can explain the risks financial loss and how insurance shares that risk, or identify factors impacting insurance premiums and grasp the relationship between premiums, deductibles, and coverage limits?
How many can state how the insurers use risk pooling and math to provide insurance coverage and make a profit?
There are no specific answers to those questions – those inside the industry may have justifiably guessed “too few.” However, half of all high school students in the U.S. may soon be equipped to tackle those questions.
A new bill introduced in California would add a one-semester course in personal finance to high school graduation requirements starting with students graduating in the 2028–29 school year.
Assembly Bill 984, introduced by Assemblymember Kevin McCarty, D-Sacramento, last week would require local educational agencies as well as charter schools to offer a personal finance course starting in the 2025–26 school year, essentially imposing a state-mandated local program.
The state is the latest in a push to get all states to adopt such a mandate, a push that is seeing great success.
AB 984 would bring California in line with 17 other states now requiring a personal finance course. According to the group backing the bill, the number of states where a personal finance course is part of the mandatory high school curriculum has nearly doubled in two years.
Currently, one-in-four U.S. high school students is required to take a personal finance course. Adding California’s more than 1.7 million students to the number of students in states where a personal finance course is required would mean nearly half the nation’s high school students will be taking the class.
Some schools already include personal finance as part of other courses, often economics. But the importance and breath of personal finance – managing or avoiding debt, saving for the future, risk management, insurance – are too weighty to be crammed in with broader topics, says the head of a group behind the bill.
“We believe that a semester course is the minimum that students need,” said Tim Ranzetta, co-founder of Next Gen Personal Finance, a Palo Alto, California-based nonprofit that provides free curriculum and professional development for personal finance teachers in every state.
According to the group, which is pushing for a guaranteed, full-semester, standalone personal finance course for every U.S. high schooler, there are similar bills in 21 other states.
The group created a detailed guideline curriculum that breaks down units and includes interactive resources.
A sizable section of the curriculum is dedicated to insurance lessons. Those units include an introduction to insurance, lessons on risk management and risk protection strategies, and a segment on auto insurance that outlines deductibles, factors that determine premiums, and how to choose an appropriate level of car insurance.
A renters and homeowners insurance segment covers reading a rental insurance agreement, the value of property insurance, and understanding which perils are covered and excluded in a policy.
Long-term disability, health insurance, and life insurance are other insurance-related segments in the guideline course.
The course also covers types of credit and managing credit, saving and budgeting, investing, consumer skills and taxes.
Next Gen Personal Finance reports training roughly 15,000 teachers to teach the course in the last three years.
According to Ranzetta, there’s broad support among Californians for making personal finance a required course. A poll by the group shows 85% of California adults support having the course as a requirement.
The bill would also put the state on track to catch up with other states.
According to Next Gen Personal Finance, 70% of high school students on other states attend a school that offers a personal finance course as an elective or a requirement. Only 25% of California high schoolers attend a school where a personal finance course is offered, the group says.
The bill was introduced on Feb. 15 and is tentatively set to be taken up in committee on March 18.
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