auto

Monitor teen drivers to cut car insurance

Tara Baukus MelloWith traffic accidents as the leading cause of death for teens aged 16 to 19, more families are turning to devices that monitor their teen's driving habits as a way to encourage better driving as well as to get better car insurance rates.

Auto insurance rates are high for teens due to the age group's high rate of accidents, which is typically due to lack of experience combined with other bad driving habits such as speeding or driver distraction. Monitoring devices allow parents to be notified of potentially dangerous driving habits as well as allow them to keep track of their teen's whereabouts.

Teen driver monitoring devices, which typically cost $150 to $250 and sometimes require a monthly subscription fee, are GPS devices that are installed in a vehicle and transmit data whenever the car is running. Many plug in to the car's on-board diagnostic computer and are easy to install. Others are hard-wired in the car for about $50 by a car audio or car alarm installation company.

Teen driver devices typically monitor the speed and location of the car. In some cases, the data is stored in the device, which then is connected to a computer to be viewed. The higher-end systems, which require a $19 to $40 monthly subscription, transmit the data in real time. With these systems, parents use a web-based interface to set up parameters for the device such as when the speed limit has been exceeded by a certain amount or when the car leaves a certain geographic boundary and whether they want to receive notifications. Depending on the system, alerts can be accessed online or sent via email or text message to the parent. Numerous studies show teens are more careful drivers when they know their driving habits are being monitored.

Insurance discounts, ranging from 5 percent to 33 percent, are offered by many carriers for monitoring devices that are permanently installed in the car. In some cases, carriers give the discount because the system is considered an anti-theft tracking device, while other carriers provide the discount because the systems encourage better driving habits by teen drivers.

Insurance carriers do not offer discounts for portable devices, such as GPS units that do not have to be physically connected to the car or cellphone apps that monitor driving, as these types of devices can be turned off or easily removed from the car.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.
 

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