American International Group announced today it is offering discounted service allowing parents to install a vehicle tracking device that e-mails them when their teenage driver is breaking the speed limit.

Dave Flower, national business director for Wireless Installation Networks LLC--the parent company of Marietta, Ga.-based MobileTeenGPS--said AIG is the first of three insurers he is working with to begin a limited market test.

The MobileTeen device is being offered in six states to AIG policyholders who have drivers aged between 15 and 17, and the insurer's initial goal is to enroll from 300 to 500 customers.

Mr. Flowers said a pilot with 50 students is being planned with Progressive for testing in Louisiana, and he is talking with a third insurer he cannot yet identify about a test with 100,000 teens.

"If the pilot has legs, then AIG plans to roll it out to a much larger group," Mr. Flower explained, adding, "This is being positioned as a coaching tool for their kids to help them develop safe driving tactics."

The equipment is a 6 inch-by 3 inch-by 1 inch unit that is mounted under the dashboard on the driver's side.

In addition to speed-limit alerts, parents can notice when teens drive outside of a predetermined area--a "geofence"--or turn off the device.

The MobileTeen Web site shows a sample e-mail, saying: "Vehicle has exceeded the designated speed limit of 60 mph" and giving the date, time, location and actual speed of the vehicle. Time and place are also given when a vehicle exits the geofence or the tracker is turned off.

Mr. Flower said AIG would be offering the device for $379 or $90 less than customers who purchase the tracking service direct from MobileTeen without insurance. In addition AIG is providing the monitoring that provides the information the teen's driving free for up to 24 months. Buying the service direct without AIG insurance costs $29.95 a month.

He said his firm is arranging for "an academic partner" to study the results of the testing with insurers because "we want to prove statistical outcomes."

New York-based AIG said its program will initially be piloted in Arizona, Illinois, New Jersey, Pennsylvania, South Carolina and Washington.

In addition to the Web, parents can instantly determine the exact location of the teen's car via any phone. Additionally, the AIG Teen GPS Program will automatically send the parent an e-mail and/or text message if the teen's car exceeds predefined speed limits or is driven too far from a predefined location.

"Parents and insurance companies share one simple goal--to reduce accidents and save lives," said a statement from Tony DeSantis, president of AIG Marketing Inc., the direct marketing division responsible for AIG Auto Insurance.

"This technology cannot prevent kids from using poor judgment or getting into accidents," Mr. DeSantis added. "However, it is a great tool to help parents and teens agree on rules, monitor behaviors, develop safer habits and ultimately save lives."

AIG Auto Insurance said it will not track individual customer's daily driving behaviors, and data gathered during the pilot will not impact a customer's rate or renewal eligibility.

The insurer did not give specifics on the savings that policyholders will receive for testing the system beyond saying there will be "a substantial discount off the normal device and monthly service fees."

Mr. Flower said the MobileTeen product has been on the market since last July, and "we get all kinds of testimonials." He said one family discovered their daughter was repeatedly roaring through a neighborhood with a 45 mph speed limit at 85 mph.

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