Most auto insurance companies charge higher premiums to insure older adults. If you’re reading this article because you’re a mature individual hoping to understand why car insurance for seniors comes at a higher price, and what you can do to lower that price, you’re in the right place.
Today, we’ll cover car insurance topics for seniors, such as:
- Why senior citizens pay more for auto insurance
- Ways older adults can decrease their insurance premium
- Extra coverages every senior should consider
We have a lot of useful information to share. Drivers, start your engines!
Why do Seniors Pay More for Car Insurance?
Insurers have been collecting – and sharing – statistics about cars and drivers for over a century.
- Fun Fact: per History.com, automobiles were invented and perfected in Europe in the late 1800s, but Americans were quick to dominate the industry. By 1920 the “Big Three” manufacturers were Chrysler, Ford and General Motors.
For 100 years actuaries – employees who study risk for insurance companies – have been compiling data and looking at trends. They have paper proof that senior drivers are more likely to have fender benders. Since the insurer will be responsible for paying these claims, they group senior drivers into risk pools, and charge more to insure them.
Can Seniors Pay Less for Car Insurance?
Absolutely! There are many techniques older adults can use to decrease their insurance premiums. From senior driving courses to bundling, we’ll cover them here.
Ways to Save on Car Insurance for Seniors
Take a Senior Driving Course: Many car insurance providers offer a discount to seniors who complete a driving course created specifically for aging adults.
A quick internet search will provide you with some options, or you might find information at your local DMV. Contact your car insurance company for a list of providers they recognize in your area, too. You will need to take the class and then submit a certificate of completion to the insurer.
Also, some insurers will only provide that discount for a few years. You might need to take the course again in the future to maintain the reduced price.
Take a Defensive Driving Course: Some insurers will provide another discount for customers who complete a defensive driver class. Every company has different requirements, and they may not “stack” the discounts for classes.
Reach out to your auto insurance company before enrolling in a defensive driving course to learn the details about discounts. Your insurer might require the discount to be applied over a period of years: 3% the first year, 6% the second year, 9% the third year, and so on.
Bundle Your Insurance Products: You’ve heard about bundling home and auto insurance products from TV and radio commercials. Sometimes, insurers will provide considerable discounts to customers who buy several lines of insurance.
- If you consolidate several types of insurance with one company you might see some meaningful savings, initially.
- Insurers DO tend to offer an affordable rate to poach your business from the competition, and then slowly increase your premium over time. We’ve written about bundling in more details regarding The Best Home and Auto Insurance Bundles.
For now, know that the more lines of business you place with one insurer, the bigger the discount usually is. Bundles do not need to only include home and auto policies, either. Renters insurance, motorcycle insurance, boat insurance, recreational vehicle insurance and even life insurance can qualify for discounts too.
- Just remember, whole life insurance policies for seniors might have considerable cash value built up. Therefore, it might be unwise to change life insurance providers for a tiny discount on your car insurance.
Once you have tried these methods, there are still more ways to find affordable car insurance for seniors.
More Ways to Save on Car Insurance for Seniors
If you’ve tried the methods above and you are still looking for more savings, there are other ways to lower your insurance premiums. Just move forward thoughtfully.
Get Quotes from Other Auto Insurers: As we mentioned above, many insurance companies are known to slowly creep their rates a little higher over time. You might save by switching companies. It is important to know you are “comparing apples to apples” though. Keep your current policy handy to make sure you’re getting the coverage you need.
Change Your Policy Details & Deductibles: Full coverage is absolutely needed if you have a lien on your vehicle (if you’re making payments to a bank). But sometimes less expensive vehicles cost more to insure than to replace the car! For instance, if you’re paying $120 per month for full coverage on a 1998 Buick LeSabre with 200,000 miles on it that is only worth $900, you’re better off dropping the full coverage. Again, this is a decision to be made only after careful consideration.
Deductibles affect your premium on senior car insurance too. Your premium will be much smaller with a high deductible. We realize that there was a time when deductibles were $50 to $250, but those deductibles are not always appropriate for seniors anymore.
- If you have a low deductible – and you have a few dollars in the bank for emergencies – ask an insurance agent what that policy would cost with a $500 or $1,000 deductible. You will be amazed how much cheaper the policy is!
- You can have an even higher deductible if you like, even $2,500 or $5,000, if you own the car outright, and there is no lienholder involved.
Just remember, if you get in a wreck, you’ll be on the hook to pay that high deductible before your insurance kicks in. If you cannot produce $5,000 in a pinch to pay for car repairs, you do not want a deductible that high.
Now that we’ve covered all the ways to save on car insurance for seniors, let’s talk about add-ons that seniors might find more valuable.
Car Insurance Coverages Seniors Should Consider
Towing and roadside assistance are essential for senior citizens. These coverages come in handy if you run out of gas, need a “jump” because an interior light was left on, lock the keys in the car, or need to be towed to a garage.
Rental car coverage is handy if you only have access to one vehicle. With rental car coverage, you know you’ll have access to a vehicle if yours is in the shop after a covered accident.
And finally, as a senior citizen you should consider increasing your liability coverage. Automobiles are more expensive than they once were. In 2021 a brand-new pickup truck with all the bells and whistles can cost $80,000!
Your state might only require $15,000 liability coverage, but if you are in an accident and found at fault, and wreck someone’s new pickup, where is the other $65,000 to come from? You would not want to lose your home or other assets over a car accident.