before they hit the road
TRANSCRIPT
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Before They Hit The Road
Presented by Eric S. Poe, Esq., CPA
Chief Operating Officer
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Teenage Driving
• Part I: Statistics That Tell A Grim Story
• Part II: What You Can Do To Make Sure Your Child is Not a Statistic
• Part III: How to Manage Your Car Insurance Costs When Your Child Gets Their License
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Teenage Driving Statistics: Fatal Injuries per 1,000 Drivers by Age
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Traffic Tickets per 100 drivers
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DWI accident incident rate by age
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The Common Tickets for Teens
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What Causes Teen Crashes?
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Key Teen Driving Statistics
• 16 year-olds have higher crash rates than drivers of any other age.
• 31% of teen drivers killed in 2006 had been drinking, according to NHTSA. 25 percent had a blood alcohol concentration of .08 or higher.
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What you should know about your teenager before they hit the road
• Studies have shown that teenagers learn from consequences NOT lectures / warnings
• Studies show that teenagers need to be provided warning of loss of privileges and enforcement of those consequences
• 2005 study by Temple University indicates that the frontal lobe of the brain leads to inability assess risks until 25 years of age
• Catch 22 as a parent: Discourage Drinking? or Acknowledge Drinking and Open Doors to Alternatives to Driving?
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Part III: How to Manage Your Car Insurance Costs When Your Child Gets Their License
• Learn how an auto insurance policies determine your rates, because your costs may depend on the company, not just the age of your newly licensed teen.
• Purchase a car for your teenager • At all costs: know what courts consider
insurance fraud and what the consequences of failing to disclose your teenager to your auto insurer.
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Basic Changes in NJ Since 2003
• Use of credit scores were permitted –92% of auto insurers nationally use credit scores to determine your rates
• Only two notable insurers decide NOT to use credit scores – CURE / NJ Manufacturers
• Use of Education and Occupation utilized by GEICO to determine eligibility into preferred company with lower rates
• January 1, 2009 introduced new territory rating factors and new criteria for acceptance (Take All Comers phased out)
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New ways for auto insurance carriers to rate you
• Credit score• Educational Attainment (Liberty, GEICO,
Skylands, Progressive)• Occupation – white/blue collar GEICO• Home ownership (Allstate)• Prior Insurance in drivers’ name• Lapse in coverage• Years with the prior insurance company
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3 Simple Ways to Save Money
• If you are gainfully employed full time with health insurance – choose the Health PIP Option savings can range $25-$50 per car/yr
• Buy a older car for your child to drive • Increase your deductibles for collision
coverage – remember it primarily only covers the physical damage to your car as a result of an accident that is YOUR FAULT
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Example of cost savings
• Husband and Wife both 40 years old with a newly licensed 17 year old female daughter living in Princeton, NJ both insuring 2005 Honda Accord LX, with $850 deductibles for COMP/COLL, no tickets/accidents in 3 years, Basic Policy:
CURE Annual Premium BEFORE child “hits the road” $1,717
With 2 cars and 3 drivers (AFTER):Annual Premium with CURE $3,211 annually
With 3 cars and 3 drivers (AFTER) with 2000 Honda with NO physical damages:
Annual Premium with CURE $2,548 annually
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Summary
• Price for car insurance is not everything• Open discussions with your child – you should
always be an alternative to drinking and driving • DO NOT COMMITT FRAUD – Reinforced in Palisades
v. Bastien (Supreme Court Case) defines threshold of fraud sufficient to “void ab initio” - which cited Mass Mut. V. Manzo (1991) explaining that a a misrepresentation is material if it “naturally and reasonably influences[s] the judgment of the underwriter in making the contract at all, or in estimating the degree or character of the risk, or in fixing the rate of premiums"