If you have a teen driver in your household, you’re probably used to gulp-inducing insurance premiums. According to The Zebra, car insurance premiums for teen drivers average $5,340 per year — about three times the rate for all drivers.
If you’re looking for ways to reduce your premiums — and keep your teen safe — you may have considered monitoring their driving with a telematics device or app provided by the insurance company. This technology offers a gateway to what’s known as usage-based insurance (UBI) or telematics. UBI can reward you and your teen with lower rates if it reveals driving that’s safer than the norm – but can also trigger the opposite if the data suggests a cause for concern.
Before installing an insurance monitoring device, here’s what to know.
How Driving Monitor Apps Work
Monitoring devices and apps are essentially digital parents who come along for the ride, to keep an eye on the way your teen is driving.
Although you can install third-party monitoring devices and apps specifically designed for parents, these don’t offer the benefit of insurance discounts. If you want to take advantage of potential discounts, you’ll need to use the app or device your insurer provides.
If your insurer offers a UBI, you sign up for the optional program and either install a device in the car or download a mobile app to your smartphone. Whenever the car is in use, the technology monitors driving activity.
These devices and apps track the following:
- Number of miles driven
- Time of day the vehicle is used
- Location of the vehicle
- Hard braking
- Rapid acceleration
- Hard cornering
- Cell phone usage while the car is in motion
- Airbag deployment
The Pros and Cons of Insurance Monitoring Devices
When considering whether to use insurance company-provided devices or mobile apps to monitor your teen’s driving, weigh these advantages and disadvantages:
| Pros | Cons |
| Potential savings | Premiums may increase based on behavior |
| Parents can review driving history | Privacy concerns |
| May prevent risky driving behaviors |
Pros
- Potential savings: With telematics or UBI policies, you could save money – at least until the initial data comes in – just for signing up for the tracking program. But, based on your teen’s driving habits, there is the potential for greater savings. Some insurers boast that you can save 30% or more.
- Parents can review driving history: The app allows you to view your teen’s driving history and get recommendations for how they might improve their driving. Suggestions might include decreasing rapid accelerations, braking more gradually and maintaining a safe speed.
- May prevent risky driving behaviors: With the potential for savings (and the knowledge that their parents and the insurer may be reviewing their driving history) your teen driver may be more cautious when behind the wheel. Knowing the app is there can help prevent risky behaviors like speeding or using the phone while driving.
Cons
- Premiums may increase based on behavior: Although you could potentially lower your teen’s insurance premiums by signing up for the app, if your teen drives aggressively, speeds or participates in other high-risk behavior, your premiums could increase.
- Privacy concerns: Despite the potential savings, consider the privacy issues. The Electronic Privacy Information Center (EPIC) recommends that consumers be cautious before signing up for telematics devices or mobile apps. Carefully read the program terms and conditions, and review how the data is used (and shared).
“There is always a risk that your data could be siphoned off and made available to other companies, and we see such a steady drumbeat of stories about data breaches,” John Davisson, senior counsel and director of litigation at EPIC said in a press release.
Examples of Apps to Monitor Your Teen’s Driving
If you decide that monitoring your teen’s driving habits with an insurance company’s app or device is a good idea for your family, these are examples of some apps and programs available:
Lemonade Car
Lemonade is a tech-focused insurance company. Its insurance policies base their premiums on your driving, and its telematics app even has features like emergency crash assistance; if you’re in an accident, Lemonade will know right away, and it can get you help if you’re unable to do so yourself.
According to the company, safe drivers can qualify for premiums as low as $30 per month for liability-only coverage.
However, it’s only available in a few states: Arizona, Illinois, Ohio, Oregon, Tennessee, Texas and Washington.
Progressive
Progressive’s Snapshot tool is one of the better-known telematics programs. The company claims it has issued over $1.2 billion in discounts through Snapshot.
The program uses either a mobile app or a built-in tracking device to monitor driving habits. The driver (and the parents) can review the app to see how safely the driver is driving.
Snapshot is available in all states, with the exception of California.
Amica
Along with getting potential discounts on insurance, Amica’s Streetsmart mobile app allows policyholders to earn rewards that can be redeemed for e-gift cards (from Amazon, Starbucks, Target and more) or donations to charities, like the American Cancer Society, Habitat for Humanity and the Special Olympics.
Streetsmart is available in 24 states: Arizona, Colorado, Connecticut, Georgia, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
Root
Root is a tech insurance company that uses a mobile app to monitor drivers. You can also use the app to file a claim in as little as three minutes and contact roadside assistance. The company said its best drivers save up to $900 per year by using the app.
Reducing Insurance Premiums for Teen Drivers
Besides monitoring devices and apps for teens, you could potentially save money by bundling coverage with other forms of insurance, such as homeowners or renters policies, or by taking advantage of discount programs like good student discounts. Some insurance companies also offer discounts for teens who complete approved safe driving courses.
Rates can vary substantially by insurer, so request quotes from several companies to find the best rates for your teen driver.
