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Track your teen's driving and cut car insurance costs

By Susan Ladika Posted : 12/27/2010

Track your teen's driving and cut car insurance costsEver wonder what's really happening when your teens get behind the wheel? Now, you can track their behavior in real time using a driver monitoring device. In the process, you might get a break on auto insurance rates.

The actual means of monitoring varies from company to company and may include:

  • Sending a notification to Mom and Dad when the teen does something incorrectly
  • Providing verbal feedback to the teen driver
  • Transmitting video of the teen's driving via a two-way camera

Such monitoring "gives you a very robust bread crumb trail" to track where your teens have been and how proficiently they drove to get there, says Dave Flower, national business director of MobileTEENgps, headquartered in Marietta, Ga.

Systems like MobileTEENgps plug into your car's onboard diagnostic port and use GPS to keep tabs on the vehicle. You can choose what you want to monitor, including speeding, arrival and departure times, when a car is moved and where it goes.

If your teen does something he or she isn't supposed to, you'll be notified. This can be done via e-mail, text or a phone call.

"The major effectiveness of the product is the fact the child knows it's on the car," Flower says. That knowledge might prevent them from doing something they shouldn't, he says.

Other tracking devices

Another system, tiwi, provides real-time verbal mentoring to drivers. If a teen exceeds the speed limit, the device asks the driver to slow down. Fail to obey and a notification will be sent to Mom and Dad.

The device also monitors things like seat belt usage, hard braking and cornering, and jack-rabbit acceleration.

The goal is to identify "what behaviors we can see before a crash," says Todd Follmer, chief executive officer of inthinc, the Salt Lake City company behind tiwi.

DriveCam created by the San Diego-based company of the same name is a monitoring system that uses a two-way camera. If it senses risky driving, it records a few seconds of what the driver is seeing, hearing and doing. The teen's driving then is scored, with the hope that parents and teens will view the video together and discuss the driving that's been recorded.

Car insurance discounts for monitoring

Generally, the devices cost several hundred dollars per unit, plus a monthly monitoring fee. But some companies have formed alliances with auto insurance companies.

For example, 21st Century Insurance and Financial Services, based in Wilmington, Del., pays for the MobileTEENgps system and the first month's monitoring for policyholders.

While there is no discount on car insurance, having the system installed provides "peace of mind," says Irene Grugan, 21st Century's director of business integration.

"Inexperienced drivers need some guidance," Grugan says. "Just because you have a license doesn't mean you're ready to drive on the road responsibly."

At Safeco Insurance in Seattle, the Teensurance program provides a discount of up to 15 percent on auto insurance rates if a GPS monitoring device called the Safety Beacon Convenience and Protection system, a GPS monitoring device, is installed on vehicles.

"We want to create a tool that helps parents and teens having a discussion about what safe practices are," says Shawn Anderson, product innovation architect at Liberty Mutual Insurance, which owns Safeco.

Use of tracking devices limited

While some teens might view monitoring as an invasion of privacy or a criticism of their driving, Safeco spokesperson Mike Plaster says "families use it to have teens prove themselves as drivers, and that can result in increased freedom."

So far, use of monitoring devices has been limited, says Bill Martin, senior vice president of Farmers Insurance Group in Los Angeles and a board member of the Insurance Institute for Highway Safety.

"I'd be surprised if it was more than one in 100 [vehicles] at the moment," Martin says.

One limiting factor is the cost of the devices and monitoring. Those costs may wipe out any car insurance rate discounts policyholders receive, he says.

Thus far, there have been only limited studies on the benefits of the devices. The auto insurance industry isn't sure if more safety-conscious teens and families install the devices, or if the devices make teens more cautious.

Either way, "they're safer drivers, so maybe they deserve a discount," Martin says.

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