Permits non-commercial private passenger car insurance to provide for an actuarially appropriate reduction in premium for cars with automotive monitoring devices

Summary of provisions

Section 1: Amends Insurance Law section 2336 to provide for an actuarially appropriate reduction in premiums for vehicles that are equipped with automotive safety monitoring devices. Such devices would be capable of alerting the parent or guardian if a minor child who is operating a vehicle that the car is being driven in an unsafe manner or outside of time or location curfew restrictions.

Such devices should help to monitor vehicular speed, location of the vehicle, distance and direction traveled, acceleration and braking patterns, the number of passengers in the vehicle and other safety indicia that indicates that the car is being driven in a safe or unsafe manner. The Superintendent of Financial Services, in consultation with the Department of Motor Vehicles shall promulgate standards for the approval, utilization and installation of such safety devices.

Existing law

Under current law, there is no statutorily approved program in New York to reduce auto insurance rates for those persons that install automotive safety monitoring devices to help monitor the driving habits of new drivers. While some auto insurers are beginning to offer programs to better monitor the driving habits of young drivers, this bill put this program in statute to help promote this concept to save the lives of our young drivers.

Justification

Drivers under the age of 21 are almost five times more likely to be involved in a fatal auto accident than persons between the ages of 30 and 69. In 2002, 41 percent of all teen deaths were caused by motor vehicle accidents. That statistic far surpasses other causes of teen deaths, i.e. 14% homicide, 11% suicide, 5% malignant tumors, and 3% heart disease. In 2009, approximately 3,000 teen drivers between the age of 15 and 19 died as

the result of a motor vehicle accident. Further, per mile driven, teen drivers were more than four times more likely than older drivers to crash.

There are several reasons for the high teen death rate in automobiles. Among the reasons are teen inexperience behind a wheel, higher levels of alcohol consumption, the tendency for such drivers to be more aggressive and reckless in traffic conditions, the non-use of seat belts, and because teens tend to drive smaller cars that offer less protection and which are more susceptible to rollovers.

Automotive safety monitoring devices such as CarChip, DriveSafe, Real-Time Tracking, RS-1000 Teen Driving System, SmartDriver, and TravelEyes 2 do exist. Further, these systems, and others have demonstrated their effectiveness to enable parents and guardians of minor drivers to monitor a youth's driving habits. Promoting the ability of parents to know the driving habits of their children should have a cooling effect on a teen's desire to drive recklessly or to travel to destinations far from home. This is because the above systems allow the parent to communicate directly with their children about unsafe driving practices near the time when such unsafe practices are occurring. In addition, teens may have a heightened desire to drive safer if they know that their parents or guardians are monitoring their driving habits and take away driving privileges if curfews are not followed.

Instituting an actuarially appropriate rate reduction for those insureds that install proven safety monitoring systems could reduce insurance rates for targeted populations by up to 25 percent. More importantly, it could save lives. The cost for installing these safety monitoring devices range from $ 160 up to $ 500, plus a monthly service fee. Encouraging parents to install these devices is a sound public policy to reduce teen deaths & injuries and the injury or death of other drivers.

A few such driver safety monitoring programs have been operating in New York, however, there is no statutory program to authorize their use. By enacting this law, it is hoped that more auto insurers will make such programs available to New York parents and guardians.

Legislative history

New Bill.

Fiscal implications

None.

Effective date

This act is effective on January 1st next succeeding the date upon which it has been signed into law.