Elderly Insurance Woes: Auto And Home Premiums On The Rise

The cost of auto insurance for seniors varies depending on a range of factors, including age, location, driving history, and financial profile. While some sources state that car insurance rates for seniors begin to increase from around 65 years old, others claim that rates tend to rise from 75 years old. On average, 70-year-old drivers pay $2,257 per year for full coverage car insurance, which is slightly lower than the national average. However, rates can increase significantly with age, and 85-year-olds may pay up to 44% more than 65-year-olds.

There are ways for seniors to save on car insurance, such as taking a defensive driving course, maintaining a clean driving record, reducing mileage, and shopping around for the best rates. Some insurance companies also offer discounts for seniors or retired drivers, and it's worth comparing quotes from multiple providers to find the most affordable option.

Auto insurance increases for the elderly due to increased accident risk and medical costs

Auto insurance rates for the elderly increase due to a variety of factors, primarily the increased risk of accidents and higher medical costs associated with ageing.

Increased Accident Risk

Age-related changes in hearing, vision, and overall health, as well as slower reflexes, contribute to a higher risk of accidents among elderly drivers. According to the Insurance Institute for Highway Safety (IIHS), seniors over 70 have higher fatal crash rates per mile than drivers in other age groups. This increased risk of accidents leads to higher insurance rates for the elderly.

Higher Medical Costs

In the unfortunate event of a car accident, older individuals are more prone to serious injuries, which can result in expensive hospital bills. The Centers for Disease Control and Prevention (CDC) notes that older adults are more susceptible to severe injuries in accidents. Consequently, insurance companies anticipate greater costs, which are reflected in higher insurance rates for the elderly.

While the specific age varies depending on the source and insurance company, auto insurance rates for seniors generally start to increase around age 65. Some sources and insurance companies, such as Progressive, state that rates tend to rise at age 75.

Strategies to Mitigate Cost Increases

To counter these cost increases, seniors can take advantage of various strategies:

• Defensive driving courses: Many states mandate mature driver discounts for seniors who complete approved driving courses offered by organizations like AARP, AAA, and The National Safety Council (NSC).
• Safe driving: Maintaining an accident-free driving record can help qualify for lower insurance rates, as many companies reward drivers for safe driving.
• Vehicle safety: Equipping your vehicle with safety features like airbags, anti-lock brakes, anti-theft systems, and anti-collision technology can lead to insurance discounts.
• Multi-policy discounts: Bundling auto and home insurance policies with the same provider often results in discounts on both policies.
• Payment methods: Paying the policy in full, rather than through monthly instalments, can sometimes reduce the overall cost.
• Location considerations: Relocating to an area with lower crime and accident rates can positively impact insurance rates.
• Shopping around: Comparing rates and quotes from multiple insurance companies can help identify the most cost-effective options.

While auto insurance rates for the elderly do increase due to accident risks and medical costs, proactive measures can help seniors mitigate these cost increases and find more affordable coverage options.

State laws may require insurance discounts for older drivers

Many states in the US mandate that drivers over 50 be given discounts for good driving or for taking approved driving courses. These state-approved defensive driving courses are offered by organizations such as AARP, AAA, and The National Safety Council (NSC). Depending on the insurance company and the course taken, senior drivers could be eligible for a discount ranging from 5% to 15% on their car insurance.

In addition to the aforementioned programs, senior drivers can also benefit from state-specific mature driver safety courses. These courses are designed to refresh driving skills, update knowledge of traffic laws, and promote safe driving practices. While these discounts may not be automatically offered by insurance providers, it is worth asking your insurer about their availability in your state.

• Geico's Prime Time program: This discount is available to drivers over 50 who meet certain requirements, such as having no operators under 25 and no violations or accidents in the past three years. However, this program is only available in 30 states.
• The Hartford's partnership with AARP: AARP members who are at least 50 can add family members to their car insurance policies and benefit from discounted rates.
• Farmers Insurance's mature driver discount: Farmers Insurance offers a discount for drivers over 55 who have completed a safe driver course in the past three years.
• State-specific programs: Certain states, such as California, have laws in place that require insurance companies to offer discounts to senior drivers who complete approved defensive driving courses.

It is important to note that eligibility requirements and discounts may vary from state to state, and not all insurance companies offer the same discounts. Senior drivers should research the specific laws and discounts available in their state and contact their insurance provider to inquire about any potential discounts they may be eligible for.

Defensive driving courses can reduce insurance premiums

Insurance companies use algorithms to assess how risky a driver is and calculate their premiums accordingly. A history of safe driving will lower your premium, and a defensive driving course is a great way to prove your commitment to safety.

Defensive driving courses are designed to help you become a better, safer driver. They cover topics such as how to avoid distractions, how to drive in inclement weather, and how to anticipate and react to unexpected situations on the road. These courses can also help you get a ticket dismissed or points removed from your license.

The cost of a defensive driving course ranges from $15 to $100, with most online courses costing between $20 and $40. The length of the course varies, but it typically lasts between four and eight hours.

Completing a defensive driving course can result in a discount of 2% to 20% on your car insurance premium, depending on your insurance provider and state. The discount usually lasts for three years, and you may be required to retake the course after that to maintain the discounted rate.

To find out if your insurance provider offers a defensive driving course discount, contact them directly and ask about their specific requirements and eligibility criteria. Remember that some insurers only offer this discount if you take the course voluntarily and not because it was mandated by a court after a traffic violation.

In addition to taking a defensive driving course, there are other ways to save on car insurance. These include maintaining a safe driving record, bundling your auto and home insurance policies, paying your policy in full, and increasing your deductible.

So, if you're looking to reduce your car insurance premium, consider investing in a defensive driving course. It will not only make you a safer driver but also help you save money on your insurance.

Discounts are available for low-mileage drivers

Discounts for Low-Mileage Drivers

Low-mileage drivers can benefit from several discounts and specialised insurance options. These are available because low-mileage drivers are less likely to crash and file an insurance claim.

Low-Mileage Discounts

Many insurance companies offer low-mileage discounts if you drive below a certain number of miles per year. For example, State Farm, Safeco, and Geico offer low-mileage discounts if you drive fewer than 7,500 miles annually. The discount amount varies depending on factors like your car type and driving history.

Telematics Programs

Telematics programs monitor your mileage and driving behaviour through an app on your phone or a plug-in device. This allows insurers to more accurately price your premium. Some examples include:

• Progressive Snapshot
• State Farm Drive Safe & Save
• Nationwide SmartRide
• Liberty Mutual RightTrack

Pay-Per-Mile Insurance

Pay-per-mile insurance is a "pay-as-you-go" version of car insurance, where your premium is calculated based on your driving activity and traditional rating factors. Examples of companies offering this include:

• Metromile
• Root
• Allstate's Milewise
• Nationwide Smartmiles
• Mile Auto

Other Discounts

Low-mileage drivers can also take advantage of other auto insurance discounts to maximise their savings. These include:

• Good student discounts
• Safe driver discounts
• Bundling home and auto insurance
• Enrolling in paperless billing
• Paying the full premium in advance

The best auto insurance for seniors balances cost and customer service

As people get older, their car insurance rates may increase as cognitive and motor skills decline, leading to more insurance claims. However, this doesn't mean seniors have to overpay for their auto insurance. There are several insurance companies that offer competitive rates, excellent customer service, and additional benefits for seniors. Here are some of the best options:

Nationwide:

Nationwide is widely regarded as the best overall car insurance company for seniors. They offer budget-friendly rates, a low level of customer complaints, and valuable coverage features such as accident forgiveness, gap insurance, and a vanishing deductible. Their SmartMiles program is ideal for seniors who drive less, as it offers pay-per-mile insurance.

USAA:

USAA is an excellent choice for military members, veterans, and their families. They offer low-cost car insurance, accident forgiveness, new car replacement, and rideshare insurance. USAA also provides great rates for drivers with various driving record problems, such as speeding tickets or accidents.

Travelers:

Travelers is a great option for seniors who are retired or don't drive much. They offer the third-lowest senior car insurance rates and have a very low level of customer complaints. Travelers also provide accident forgiveness, gap insurance, and a vanishing deductible. Their IntelliDrive usage-based insurance program can benefit safe senior drivers.

Erie:

Erie stands out for its exceptional collision repair process, receiving the highest grade from collision repair specialists. They offer competitive rates for senior car insurance and decent coverage options, including accident forgiveness, gap insurance, and a diminishing deductible. Erie's Rate Lock feature ensures that your rate remains the same unless you make specific changes to your policy.

Auto-Owners:

Auto-Owners has the lowest customer complaint ratio among the top-scoring companies. They have above-average scores in the J.D. Power Auto Claims Satisfaction Study and the CRASH Network Insurer Report Card. While their rates are generally below the national average, drivers with poor credit or a DUI may find better rates elsewhere.

Geico:

Geico is a good choice for seniors with poor credit, as they offer competitive rates for this demographic. They also have a low level of customer complaints and provide accident forgiveness and SR-22 filings. However, Geico does not offer gap insurance, new car replacement, or vanishing deductible options.

Progressive:

Progressive is ideal for seniors with a DUI on their record, as they offer the cheapest rates for this group. They also have below-average rates for senior drivers in general and provide a wide range of coverage options, including rideshare and gap insurance.

When choosing an auto insurance company, seniors should consider not just the cost but also the level of customer service and the range of benefits offered. It's essential to shop around, compare rates, and read reviews to find the company that best suits your needs.

Frequently asked questions