before they hit the road

Before They Hit The Road

Presented by Eric S. Poe, Esq., CPA

Chief Operating Officer

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

Teenage Driving Statistics: Fatal Injuries per 1,000 Drivers by Age

Traffic Tickets per 100 drivers

DWI accident incident rate by age

The Common Tickets for Teens

What Causes Teen Crashes?

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.

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?

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.

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)

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

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

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

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"