Trevor is a hypothetical 11-year-old. If he's like 11-year-oldsin my area, he's gotten a whiff of financial literacy from schooland computer games: The school has given him a chance to spend hismoney to buy lunch, bake sale items and books. It's also given hima job running an in-school post office.

Computer games have given him additionalexperience in simulations that let him work as a baker, afarmer, a tailgunner and a spy. So far, though, he doesn't seem tohave picked up any insurance literacy. When he dies in a game, hecomes back to life because that's how the game worked, not becauseof any insurance.

When he plays farmer games, he has to worry about planting theseeds and harvesting the crops, but not about paying the crop insurancepremiums.

His parents have tried to explain what insurance is and how itworks, but why should a kid believe anything that comes only fromhis parents? Why would a kid trust those boring old people to knowhow the world works?

One result is that many Americans reach adulthood, or even seatson congressional committees that oversee federal health programs,with only a hazy idea about the difference between a pre-existingcondition exclusion in a health insurance policy and medicalunderwriting.

For example, about 7.5% of consumers are so utterly lost theythink a health plan deductible is the total amount of medicalexpenses the plan will cover each year.

I think the solution is that states should require thatevery child in a public school in America get at least one hourof classroom instruction explaining what insurance is, how it'ssupposed to work, how it's regulated, what insurance agents andbrokers are, and where consumers should go when they have problemswith insurance policies or insurance agents.

Good high schools should build student-run pencil and notebookinsurance plans into the math or social studies curriculum.

All students should get $2 in nickels and be required tocontribute some of the nickels to pay for pencil and notebookinsurance for a month. They should get to choose whether to use therest to self-insure or to buy voluntary insurance.

At least one day during insurance unit month, each kid shouldget to help serve on the pencil and notebook money insuranceadministration team, and work on processing and adjudicating claimsfrom students who lost or forgot their pencils or notebooks. Theycould then sell replacement pencils and notebooks to the studentswho received plan benefits.

Spending a day or two administering the claims filed by chronicpencil and notebook forgetters might give the students some idea ofhow the people at the insurance companies see the world.