GPS May Lower Insurance for Teen Drivers
Here's a new way to get a discount on your teen's auto insurance: get a GPS in your car!
No kidding: AIG insurance is launching a new program where your teen can get a better rate on insurance, on the condition that you install a small GPS unit in the car. According to an article on Insurance Newsnet, you simply have to install a device from MobileTeenGPS, which is done in about 20 minutes. Once the unit is in, parents can check the exact location of their teen's vehicle via the Web or by phone. There's more: the AIG Teen GPS program will also alert parents if the car exceeds a certain speed or strays outside of a pre-defined area.
The intention is that the program allows parents and teens to agree on ground rules for driving priveleges, while also providing parents with the ability to monitor whether their teen is living up to his or her end of the bargain.
While some people complain that this is another example of discrimination in insurance underwriting, there is a real need for better monitoring and control of young drivers. The statistics tell us that the leading causes of death in 16 to 20 year olds are car accidents. Parents may find out too late that their teen was a driver that took excessive risks. The high rate of accidents is the primary cause behind sky high insurance premiums for this age group.
The program is being piloted now in Arizona, Illinois, New Jersey, Pennsylvania, South Carolina and Washington.
While you may be able to reduce insurance costs with a variety of other techniques, you are likely to get the best deal with the GPS system as a part of your approach.