How to Get the Cheapest Car Insurance Rates for Seniors
Turning 65 (or thereabouts) may bring about the joy of retirement.
But depending on what state you live in, it may also mean an increase in your car insurance premium.
That being the case, let’s look at average car insurance rates for senior and older drivers, and provide some tips and strategies for how you can fight back.
Are Car Insurance Rates Higher as You Get Older?
Most likely, you won't have to worry about your rate changing too much, at least not in your 50s and 60s.
Insurance companies base their rates on the risk of specific age groups.
Once you hit the age of 65, and especially 70, your rates will start to rise.
Below are national average rates for seniors for 100/300/100 coverage, commonly referred to as “full coverage”*** (source: Insurance.com):
- Age 55: $1,363
- Age 65: $1,402
- Age 75: $1,654
- Age 85: $1,987
The average rate for a full coverage policy for an 85-year-old is about 20% higher than that of a 75-year-old driver, and over $300 more per year.
(***100/300/100 refers to liability coverage levels.
The first number represents bodily injury or death to one person in a single at-fault accident.
The second number represents bodily injury or death to two or more people in a single at-fault car accident.
The third number refers to property damage caused to other vehicles in an at-fault accident.
Full coverage also includes collision and comprehensive coverage, which pays for repairs to your vehicle no matter who is at fault.)
General Advice for Shopping for Car Insurance for Seniors
In many – but certainly not all – states, car insurance premiums will rise as you get older.
Fortunately, the increase isn’t as dramatic as it is for drivers under 25, but it can still be a factor.
Why do car insurance companies raise premiums for older drivers?
Let’s start by pointing out that increasing premiums for older drivers isn’t a classic case of age discrimination.
Insurance is all about managing risk.
Drivers with certain characteristics will necessarily pay more for car insurance.
The most obvious example are younger drivers. Though it applies to drivers under the age of 26, it’s especially acute for those in their teens.
Because they lack driving experience, and often tend to be more prone to engage in reckless behavior, insurance companies charge higher premiums to compensate for the increased risk.
The same is true with older drivers, though for different reasons.
For example, as we age it’s normal to experience a decline in vision, hearing, and reaction time.
Statistically speaking, older drivers are more likely to be involved in at-fault accidents than, say, middle-aged drivers. That’s the reason why car insurance companies charge slightly higher premiums for seniors.
Even so, as you’ll learn in this guide, there are plenty of ways you can offset age-related premium increases with discounts and other strategies.
In some cases, you may even find yourself paying less for car insurance than you paid during your working years.
Discounts and Ways to Get Cheaper Coverage for Older Drivers
Fortunately, there are plenty of discounts available for seniors.
They may not completely eliminate the premium increase due to age, but they will minimize the damage.
Any of the following discounts can help, at least if you haven’t taken advantage of them up to this point.
You may get a discount if you get your insurance policy through a group like the AARP or AAA.
AARP even offers car insurance for seniors through an arrangement with The Hartford.
(But, be careful because The Hartford is generally not a lower-cost providers in most states.)
Changing your status from an occupation to retiree may reduce your rate.
Your insurer may reclassify your status, making your rate lower owing to the reduced risk from no longer commuting.
Take a defensive driver course
In some states, this is a government mandated discount. Whichever company you decide to go with may allow you to take approved driver defense courses.
Most likely, you will only be allowed to take one per year, but it can still lower your rate.
Combining home and auto insurance policies – or even life insurance – can benefit senior drivers the most.
Bundling will allow for savings on both or all three types of insurances, allowing you to save up to 30%.
Usage-insurance (UBI) plans
Consider adding an insurance company device to monitor how you drive. UBI devices will usually measure your speed, time of day, braking, and turning.
If you’re a good driver, your rates will be lower. If you’re driving qualifies your premium may fall as much as 30%.
Buying a new car or newer car can lower your rate. Safety features have been added to newer cars (backup cameras, sensors on side mirrors, etc.).
These features make it easier for elderly drivers to stay safe on the road, leaving them at a lower risk on the road. That can translate into a discount.
Pay in full
Paying your car insurance bill in full can save you up to 10% on your rate. It’s also a good way to eliminate a monthly payment.
Protect your car
Besides helping you avoid a loss, anti-theft devices can score you discounts with many insurers.
Adding devices, such as car alarms, anti-theft locks, and vehicle tracking systems like OnStar and Lojack, can save you money on your premium.
Check with your insurer to see which devices qualify.
Another potential discount is etching your VIN number onto the windshield. Insurance companies allow a discount as it reduces the risk of the car being stolen.
More General Tips and Advice for Auto Insurance Coverage for Seniors
Apart from discounts, there are several ways you can minimize your premium, and many have nothing to do with your driving history.
Staying loyal to the company you’ve had your policy with for several years can get you the best rate into your older years.
You may already have the best deal going with your current car insurance company.
Your rate can change – higher or lower – if any circumstances arise.
For instance, purchasing a new or different car, adding or removing a driver, marriage or divorce, moving, adding a teen driver, purchasing a home, a DUI or major violation, an at-fault accident, or major change in your credit score.
You’ll want to inform your insurance company if any of those happen as it could cause a change in your rate (up or down).
You may be able to secure an even lower rate if you choose to go with another company.
Increase your policy deductible
Increasing your deductible from $250 to $500 can lower the cost of comprehension and collision as much as 30%.
You can save even more if you raise your deductible to $1,000.
Just know that the more you raise your deductible, the more you’ll pay out of pocket should an accident occur. It will help to have enough in an emergency fund to cover the increased deductible.
Keep your credit clean
Most companies look to your credit to determine your rate.
Even as you get into your older years, your credit score will still play a big role in determining your rate.
Insurance companies have statistics showing that drivers with poor credit are more likely to incur moving violations or at-fault accidents.
The Low Mileage Advantage
This is where older drivers have a built-in advantage. If you’ve retired, you’re probably logging far fewer miles than you did when you were working.
This is commonly referred to as the low-mileage discount.
Driving less than 7,500 to 10,000 miles means less time on the road. Insurers view this as lower risk for getting into accidents.
Some companies will even give a discount for even higher mileage, up to as many as 15,000 miles.
If you’re currently driving fewer miles than you were when you first took your policy, you need to inform your carrier.
Maybe stop driving altogether
There’s an even more effective savings strategy, though it’s admittedly radical. That is to stop driving.
No, it’s not a very popular tip, but if your driving record has your rates through the roof, it may be time to stop driving.
As you get older, your age may start to become a factor.
Vision can become a problem, especially at night. If you’re having memory issues, you may find yourself getting lost and forgetting where you are or where you’re going.
Response time becomes slower, failure to see and follow traffic signals and road signs happens more frequently, and it gets harder to turn to check your mirrors when changing lanes or turning.
If you’re finding it difficult to drive, and even more difficult to cover your insurance premium, stopping driving is the ultimate way to lower your premium.
Of course, it will work best for those who have alternative means of transportation or may have reached a point where driving has become difficult or even dangerous.
But if that’s the case, the silver lining will be lower insurance premiums.
Shop for New Coverage
The difference in rates between companies can be hundreds to thousands of dollars.
You’ll also find that some companies offer more discounts for seniors than others.
As an example (and again from information obtained from insurance.com), below are the average annual premiums for a 75-year-old driver in Illinois:
- GEICO: $570
- State Farm: $663
- Progressive: $672
- Nationwide: $933
- Farmers Insurance: $1,114
- Allstate: $1,494
As you can see from this short list, the average annual premium for Allstate is more than twice as high as it is for GEICO, State Farm and Progressive. That’s a lot of savings from a single strategy.
We suggest that when looking for a new company, you compare prices between at least three different insurers.
Unless you are making changes, like adding or removing a car from your policy or changing limits, you should be able to use your current policy's information to make sure you're comparing like policies.
Be careful when shopping, however.
You don’t want to find yourself paying a lower premium on a policy with lower limits.
If you have a large amount of financial assets you’ll need sufficient liability coverage to keep those assets from becoming a target in a lawsuit.
Just as you likely paid more for car insurance in your teens and early 20s than you did for most of your life, you may pay a little bit more as you move past age 65.
But by following the tips and strategies in this guide you should be able to continue to maintain the low premiums you’ve enjoyed for most of your adult life.