News Release

New Jersey Department of
Banking and Insurance
Commissioner Holly C. Bakke

For Immediate Release: December 9, 2004

For Further Information:: Mary Cozzolino - (609) 292-5064

Teaching High School Drivers the ABCs of Auto Insurance

MEDFORD – The New Jersey Department of Banking and Insurance is committed to educating young drivers on the ABCs of auto insurance. That was the message Department staff delivered yesterday at Lenape High School in Medford.

“The State of New Jersey is playing an important role in teaching our newest drivers the basics about auto insurance,” said Acting Governor Richard J. Codey. “Along with the rules of the road are penalties for failing to obey them, which can lead to much higher auto insurance costs for young drivers and their parents. Our goal is to help them be safer drivers and better consumers with auto insurance that costs less.”

“Parents of new drivers have many more options today thanks to recent auto insurance reforms,” Commissioner Holly C. Bakke said. “I urge consumers of all ages, specifically our state’s youngest drivers, to shop around for the best price on auto insurance coverage.”

James Lavery, a Department community educator, taught driver education students the basics of auto insurance. He answered questions such as, What is a premium? What is a deductible? Will my parents’ auto insurance costs go up?

Since 1998, Lavery and other Department educators have traveled from High Point to Cape May and Rockleigh to Salem teaching citizens about various aspects of auto insurance, including basic information on premiums and deductibles. Program participants learn how speeding tickets and drunk driving cannot only put their lives at risk, but also cost them money with higher auto insurance premiums.

“Our auto insurance workshops serve as practical guides for drivers of all ages,” said Lavery. “This information is especially important to parents and students who are responsible for their auto insurance costs.”

The program also covers auto insurance fraud, a serious crime in New Jersey that can lead to jail time. Insurance fraud costs consumers nationwide $70 billion annually and costs each person $1,300 every year.

“Insurance fraud costs everyone money,” said Commissioner Bakke. “But it also puts innocent people, including our youngest drivers who are just starting to gain experience on New Jersey roads, in danger.”

Yesterday at Lenape High School, Lavery went over several types of fraud schemes, like the “Swoop and Squat,” a staged rear-end accident that often targets unsuspecting young drivers, commonly used by organized rings.

“Auto insurance fraud rings often target young drivers,” said Lavery. “After the first six months, when drivers get over being nervous, they feel like they can do anything. But they are still not experienced enough to avoid these types of accidents. Education and awareness training goes a long way in helping new drivers of all ages stay safer on the road and avoid being victimized.”

Community educators utilize videos; many of them produced at the Department’s studio, to help drive home the point that auto insurance fraud isn’t just about stealing money from insurance companies and consumers. It’s also a safety issue. “People can get hurt, and sometimes killed, in staged accidents,” stressed Lavery.

Department educators have trained insurance company executives, law enforcement officials, business people, high school students and civic group members on various insurance industry related issues. Over the years, the Department has branched out into other programs such as general consumer awareness for seniors and identity theft.

“The number of requests for our education programs has grown rapidly,” said Commissioner Bakke. “Over the last six years, the Department has presented more than 1,300 programs to more than 65,000 people.”