Study: Young people lack insurance literacy; lost luggage costs €2,000 as a lesson

Young people often come across insurance in childhood, yet they do not always understand how it works. A survey by insurance technology company Balcia found that only 9% of young people aged 13 to 21 talk about insurance often in their family, while one in five never does. At the same time, half of respondents say their parents have bought insurance for them.

The research also shows that 50% of young people would like to learn about insurance in a family setting. Edgars Korzāns, head of Balcia’s business in Latvia, stresses that buying a policy alone is not enough – children need to be explained why insurance is necessary, what it covers and how to act in an unexpected situation. According to him, family conversations are an opportunity to build financial security awareness and responsible decision-making early on.

Digital content creator Kate Vīgante admits that in her childhood finances were rarely discussed. Parents would simply tell her they had bought insurance, and at school the topic was not covered as part of financial literacy. Much had to be learned on her own. She recalls a trip from the United States several years ago: her brother’s suitcase mysteriously disappeared. Although insurance had been purchased, it did not cover all losses. The suitcase was found only after two months, but returning it to Latvia cost the family about €2,000. The incident made her realise that having insurance is not enough – one must also understand the terms.

The survey additionally reveals that only 31% of young people believe they could independently choose suitable insurance. Alongside practical experience, young people need knowledge to evaluate coverage and make informed financial decisions. The family remains one of the key environments where such understanding can be built before life forces learning from one’s own experience.