New gadgets may lower insurances costs and help keep teen drivers safe

By Rebecca Theim on September 4th, 2010

The same technology that brought us cell phones, texting and in-car global positioning system (GPS) devices now makes it possible for parents to know how teens are driving when they're on their own, and to even limit or prevent some behavior:

  • General Monitoring: Davis Instruments' Car-Chip plugs into a port in most 1996-and-later vehicles and records speed, mileage and other information. It can beep if a driver exceeds certain speeds or commits other driving mistakes.
  • GPS-Based: Inthinc's Tiwi provides teen drivers beeps or verbal warnings like, "Unsafe acceleration. Ease off gas pedal." The gizmo also does something teen drivers will likely appreciate: it gives them a chance to correct bad behavior before reporting it to parents.
  • Video: If a teen engages in aggressive or inattentive driving, DriveCam captures sound inside a vehicle along with views of the interior and the road. The video uploads to a website where parents can view it.
  • Smart Keys: Starting in the summer months of 2010, Ford will roll out MyKey as standard equipment on the 2010 Ford Focus. It allows parents to limit a vehicle's top speed and audio volume, and mutes the stereo if seat belts aren't buckled.
  • Cell Phone and Text Controls: iZup is a cell phone application that prevents the phone from ringing or placing calls if it's moving more than 5 miles per hour, sends incoming calls directly to voice mail and holds text messages, all while allowing calls to and from parents' cell phones or to 911.

Some Insurers Offer Discounts

Some insurance companies provide discounted young driver car insurance to families who use such devices. For example, American Family Insurance created the voluntary "Teen Safe Driver" program, which qualifies new drivers in some states to receive a 10 percent discount on their car insurance, according to American Family spokesman Ken Muth. American Family partners with San Diego, Calif.-based DriveCam to provide the technology that monitors driving behavior.

DriveCam's system includes a camera installed inside the car that records sights and sounds inside and outside the vehicle. The camera, however, only activates if it detects "risky driving behavior" such as swerving, hard braking, sudden acceleration or a collision. Parents can review any video recordings online and receive weekly e-mails assessing the teen's driving performance. The videos are only available for viewing by the parent and an analyst from DriveCam, but not by American Family, which does not base insurance rates on information from the system, Muth says.

American Family covers the cost of the DriverCam equipment and installation is free at specified locations. Although the program is only available for the first year a teen drives, the discounted car insurance for participating can last several years. For example, in Minnesota, the discount begins after the teen completes the one-year program, but continues until the driver turns 21, according to Muth.

About 10,000 families are currently enrolled in the program, he added.

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