Teen Driver Law Lowers Premiums

COLUMBUS -- Ohio's new law restricting young drivers is saving some people money on car insurance bills because companies believe the regulations will lower accident rates.

Some insurance companies lowered teen driver rates after the law that restricts the hours teens may drive and their number of passengers went into effect April 6.

Teen drivers with Grange Insurance will get up to a 5 percent discount when the company cuts its rates in June. Allstate Insurance Co. lowered fees last summer in anticipation of the law, and teen drivers can further cut their rates by taking an online safety program, spokeswoman Lisa Finney said.

In the last 18 months, State Auto Insurance dropped rates for teen drivers by 5 to 10 percent, said Joel Brown, vice president of personal insurance.

"Insurance companies are starting to see lower losses from teen drivers, and are turning around and passing those savings on to customers," said Mary Bonelli, spokeswoman for the Ohio Insurance Institute.

State Farm Insurance Cos. and Nationwide Mutual Insurance Co., the largest and third-largest auto insurance providers in the state, respectively, say they'll wait to see if the law lowers the accident rate for young drivers. A study by the Ohio Department of Public Safety suggested states with similar laws saw a 23 percent drop in teenage accidents.

Ohio's law bars drivers under the age of 17 from carrying more than one non-relative as a passenger. It also blocks drivers under 17 from driving from midnight to 6 a.m., and 17-year-old drivers can't be on the road between 1 a.m. and 5 a.m. Exceptions can be made if the teen is driving to and from work, and the hours or number of passengers don't matter if a parent or guardian is in the car.

When the law took effect, some teens grumbled that it was unfair and that parents should have the right to determine who and when their kids drove.

Proponents argued the restrictions mean fewer distractions for teen drivers, and as of February, 43 other states had passed laws similar to Ohio's covering teen drivers.

Kentucky has had a similar law for several years.

The average auto insurance premium for a driver in the state of Ohio is $680 dollars, and Bonelli said the Ohio Insurance Institute advises consumers that adding a teenage driver to their policy roughly doubles their premium in most cases.

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