Unit 8: Protecting Yourself: Insurance, Identity and Scams

Last updated 10/14/2026 by

Andrew Latham

Summary:

One uninsured accident can wipe out years of saving, and scammers target young people constantly. In FTC data, people in their twenties who report fraud lose money more often than older adults do. Knowing the patterns is the best defense.

This is Unit 8 of 9 in Money 101 by SuperMoney, a free personal finance course. It takes about 1.5 weeks in a classroom, or 45 to 90 minutes on your own. Then take the five-question quiz below. Score 4 of 5 to mark the unit complete.

What you’ll learn

Explain premiums, deductibles, copays, out-of-pocket maximums and coverage limits.
Describe health, auto and renters insurance.
Recognize common scams aimed at young people.
Protect your identity with strong passwords, two-factor authentication and credit freezes.
Report fraud.
Understand how gambling and sports betting apps are designed.

Key terms

Premium: What you pay for insurance, monthly or yearly.
Deductible: What you pay out of pocket before insurance starts paying.
Copay / coinsurance: Your share of a covered cost after the deductible, as a flat amount or a percent.
Out-of-pocket maximum: The most you pay for covered health care in a year. After that, insurance pays 100%.
Liability coverage: Auto insurance that pays for damage or injuries you cause to others. Required in nearly every state.
Renters insurance: Covers your belongings and your liability as a tenant. Often inexpensive.
Identity theft: Someone using your personal information to open accounts or commit fraud.
Credit freeze: A free block that stops new credit from being opened in your name. Does not affect your score.
Phishing: Fake messages designed to trick you into giving up information or money.

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Lesson 8.1: How insurance works

Insurance moves a risk you cannot afford onto a company, in exchange for a premium. When something goes wrong, you pay the deductible and the insurer pays the rest of a covered loss, up to the policy limit. A higher deductible lowers your premium but means paying more yourself when you claim. Choose a deductible your emergency fund can cover.

Health: you can usually stay on a parent’s plan until 26. After that, coverage comes from an employer, the marketplace at HealthCare.gov or Medicaid. The out-of-pocket maximum is the most you could owe in a bad year. Auto: liability coverage is required almost everywhere. Collision and comprehensive cover your own car. Renters: covers your stuff if it is stolen or destroyed and is usually one of the cheapest policies you will ever buy.

Lesson 8.2: Scams that target young people

Scams change their story but share the same signs: urgency, secrecy, an unusual payment method (gift cards, crypto, wire transfer, payment apps) and an offer that is too good. Common ones aimed at young people:

Fake jobs that send you a check, ask you to buy equipment or gift cards with part of it, and then the check bounces. Online marketplace scams where the seller wants payment by app before you see the item. Impersonation texts from “your bank” or a delivery company with a link. Crypto romance or investment scams that start with a friendly message and end with a fake trading site. Sextortion, where someone threatens to share images unless you pay. If this happens, do not pay; stop contact, save the messages and tell a trusted adult. The FBI and the NCMEC Take It Down service can help.

Lesson 8.3: Locking down your identity

Use a unique password for every financial account, stored in a password manager, and turn on two-factor authentication. Never share one-time codes with anyone. A real bank will never ask for them.

A credit freeze at Equifax, Experian and TransUnion is free and stops anyone from opening new credit in your name. You can lift it in minutes when you apply for credit yourself. Parents can freeze a minor’s credit too.

If you are a victim, report it quickly: to your bank or card issuer, to the FTC at IdentityTheft.gov or ReportFraud.ftc.gov, and to local police if needed. Speed matters, especially for debit cards and bank transfers.

Lesson 8.4: Gambling and betting apps

Sports betting and casino apps are designed to keep you playing: bonus bets, push notifications, near-misses and fast, frictionless deposits. Every bet carries a house edge, the built-in margin that guarantees the operator profits over time. On a standard sports bet you must risk $110 to win $100, so a bettor who picks winners 50% of the time loses money.

Legal betting ages are 21 in most states. If betting stops being fun or you chase losses, free help is available at 1-800-GAMBLER.

Worked example: the fake check job

A common pattern reported to the FTC.

Day 1: “Employer” mails a $2,000 check	Bank makes funds available within days
Day 3: You buy $500 in gift cards for “equipment” and send the codes	Gift card money is gone instantly
Day 10: The check bounces	Bank removes $2,000 from your account
Result	You owe the bank the $500 you spent, plus any fees

Takeaway: “Funds available” does not mean the check is good. No real employer asks you to buy gift cards.

Activity: Scam or legit?

Sort the messages in the Document Pack (Appendix D) into scam or legit. For each scam, name the red flag. Then, with a parent’s help, look up the premium and deductible on one real family insurance policy.

Messages you marked as scams and the red flag in each
Messages you marked as legit and why
One insurance policy: type, premium, deductible
Could your emergency fund cover that deductible?
Have you set up two-factor authentication on your email? (yes / no)

The printable worksheet and the sample documents for this activity are in the Money 101 course book (PDF).

Reflect: Have you or someone you know received a scam message? What gave it away, or what made it convincing?

Up next: Unit 9: Capstone: Your First Year on Your Own | Previous: Unit 7: Investing and Building Wealth | Course overview

Andrew Latham

Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.

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