Take A Class, Save On Your Car Insurance

In these recessionary times -- and they don't appear to be going away any time soon -- everyone's ears perk up when they hear about new ways to save money on the cost of owning and operating an automobile.

So consumers will be happy to know that, in many states, drivers are able to take online "driving courses" that can lead to significant cuts in auto-insurance premiums and other costs.

These online courses are essentially "refresher courses" in defensive driving. Generally, participants log on and find themselves in an animated onscreen world, motoring along a "virtual" road, where they come across various driving situations that test their knowledge and skills -- and give them a "driver's re-education" along the way.

In some states, after completing the course, motorists receive a discount of anywhere from five to 15 percent on the price of their insurance premiums. The discounts typically last for three years, and then the motorist has to re-take the course to qualify for another discount.

Other Uses for Online Driver Courses

Besides these online courses offered in some states for the purposes of reducing insurance premiums, other states offer online courses for such purposes as ticket dismissal, fine reduction, and point reduction -- all of which, ultimately, are also money-savers. More than 25 states offer online courses for one or more of these purposes, according to Ian Bonewitz, manager of regulatory business development at I DRIVE SAFELY, a company that designs one of the online courses.

But before the classes can be offered -- and before insurance companies are authorized to give discounts -- the program must first be passed into law by individual state legislatures.

In states where legislation has not yet been passed to approve the reduction in insurance costs for those who take these online courses, some insurance carriers allow their policy-holders to complete the class and then receive a "good-driver" discount, said Bonewitz.

The state of New York recently began offering the online courses for insurance-premium-reduction -- for a fee of around $50. The program just began in mid-May, said Ken Brown, a spokesman for the New York Department of Motor Vehicles -- so the state doesn't have any hard data yet on how many drivers have completed the class, but those who do complete the course will receive a 10 percent annual cut in their premiums.

New York, like many other states, has also been offering conventional defensive-driving refresher courses in classrooms for many years. The American Automobile Association (AAA) has been offering such classes since the 1970s, said William Van Tassel, AAA's manager of driver training programs

The online classes are designed by private companies, but they get input get from the Department of Motor Vehicle or Secretary of State offices in each state, to make sure that the classes meets the states' standards.

"What's good about these programs is that they offer further instruction -- reminders of good, defensive-driving behavior -- to motorists who might not have not taken a driver-education course in 30 or 40 years or more, since they first got their driver's license," said Brown of the New York DMV.

"And offering the course online can be much more convenient for those who might have a difficult time attending the conventional courses in classrooms, either because of their work hours or other responsibilities." Brown said that about 650,000 New York motorists completed the classroom version of the course in 2008.

The Companies Who Design Them

Among the companies and organizations who design the online courses are An Online Defensive Driving Course By Improv, USA Training Company, Inc., American Safety, Inc., I DRIVE SAFELY, American Safety Council, Inc. and the National Point and Insurance Reduction Course, Inc.

The costs of the online courses vary, but the fee is typically about $50, compared to an average cost of $20 to $40 for the classroom course.

AAA partnered with I DRIVE SAFELY to design the company's online course, said AAA's Van Tassel.

"We got involved in the design of the content to make sure it meets AAA's standards," said Van Tassel. "We support these classes as a great way to refresh your knowledge and come up to speed on driving tips and techniques that may be new to some drivers. That's because some these tips have only been developed in recent years, and, for some drivers, it's been many years since they first took driver's education."

As an example, Van Tassel observed that, "like a lot of people, I was taught that you should keep your hands on the steering wheel in the 10 o'clock and 2 o'clock positions. But that is no longer recommended. Now, the recommendation is that you keep your hands at 8 and 4, or 9 and 3."

That recommendation, he said, is "based on additional research on how quickly drivers turn the wheel in an emergency situation. And with that high hand grip, it was discovered that people were turning the wheel too much," sometimes resulting in changes of direction that were too drastic.

"Plus, with that high hand grip, it was discovered that the forearm was crossed over the steering wheel right at the point where the airbag comes out -- which could result in the forearm being rapidly pushed up against the driver's face if the airbag deploys."

"The online courses vary from state to state, in terms of which company's course is used, and some states may use several different courses, developed by different companies. For example, the online insurance-reduction course offered by I DRIVE SAFELY is used for motorists of all ages in Delaware, New York, New Jersey, North Dakota and Kansas," said Bonewitz of I DRIVE SAFELY.

In addition, he said, the course has been approved for drivers aged 55 and over in 12 states, including California, Washington, Colorado, Florida and Nevada.

New York is using online courses developed by five different companies. In Michigan, the state legislature recently approved the online courses, but the program won't take effect until December of 2010, said Nancy Cain, a spokeswoman for AAA Michigan.

Other Ways to Save on Insurance

But online driving courses aren't the only way motorists can save money on their auto insurance, said AAA's Van Tassel.

"In some states, teens can get an insurance discount for completing a driver's education course," he said. That may surprise those of us who grew up in states where such driver's-ed courses were, in fact, mandatory before a teenager could even get their drivers' licenses.

"In many states, though, driver's education courses are not required -- once you turn 18, you can just take the test, and if you pass, you get your license," said Van Tassel.

Another discount is offered to teens who get good grades in school.

"The insurance companies did some research, and they have data to suggest that teenagers who are good students, who get higher grades, are less likely to drive in a risky, aggressive manner," said Van Tassel. "So, these kids have a much lower incidence of filing claims -- so they're better insurance risks."

To find out if your state offers an online driver's course, and which type is being offered, contact your state's Department of Motor Vehicles or Secretary of State's office.

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