As we get older, our driving experience goes up and our risk factor goes down, our car insurance premiums tend to decrease as well. Drivers in their 50’s and 60’s are considered to be in good health, with quick reflexes and reliable hearing and vision. As such, premiums typically decrease as we reach middle age. However, once you reach the age of 65, your insurer may increase your premiums, and by the time you reach your 70’s, you can expect an increase.
According to a study provided by the National Highway Traffic Safety Administration, “Older adults are generally capable, conscientious drivers, but some have experienced changes associated with normal aging, with medical conditions common in older adults, or medications to address those medical conditions that undermine their ability to drive safely. Thus, these drivers may pose a hazard to themselves and to other road users. Studies have compared characteristics of older driver crashes to those of younger or middle-aged drivers…driver’s 70 and older, and particularly 80 and older, were overrepresented in intersection crashes.” Additionally, a special investigations report published by the National Transportation Safety Board on Wrong-Way Driving shows that drivers over the age of 70 are overrepresented in fatal wrong-way crashes.
Or in other words, coupled with the fact that the human body is more fragile in our 70’s, 80’s, and 90’s, car insurance for older drivers can become more expensive as the risk for accidents and fatalities increase exponentially.
But aging doesn’t necessarily mean great discounts and rates can’t be found. Consider the following tips to potentially save on your car insurance rates.
Drive less. If you’re retired and you’ve stopped commuting, chances are you’re already driving less miles per year. Low-mileage is generally considered around 5,000 – 7,500 miles per year. Depending on your state, low-mileage discounts may be more than 10 percent.
Usage-Based Insurance (UBI). Telematics track the way we use our vehicles, either through devices installed in our vehicles, or mobile apps such as EverDrive. With ratings in acceleration, speeding, braking, turning and distracted driving, a good score in these metrics may result in discounts as more and more insurance companies are turning to telematics to offer competitive rates for safe drivers.
Companies such as Progressive and Allstate were early to adopt UBI, with Progressive’s Snapshot claiming to offer the average driver a $130 discount and Allstate’s Drivewise offers users the chance to earn points that can be used towards rewards such as gift cards and name-brand merchandise. Approximately 70% of all auto insurance carriers are expected to use UBI by 2020. It’s estimated that 142 million customers will sign up for telematics-infused policies by 2023, up from 12 million in 2015.
Change the primary driver. If the circumstances in your household have changed and you’re no longer the primary driver in your household, potential savings may be available if the primary driver is younger.
Safety features. Features like anti-lock brakes may net you a discount between 5%-10%, while air bags may net a discount between 2%-30%. Geico offers up to 40% discount if your auto has full-front seat airbags. Daytime running lights have been shown to reduce risk of accident. If your auto is equipped with them, your insurer may offer a discount for this feature as well.
Recent technological advancements includes rearview cameras, collision warning systems, and parking assistance, which may help prevent accidents and claims. While most insurers are yet to offer discounts on these safety features, they are compiling data and it seems it’s only a matter of time before a discounts are available.
Raise your deductible. If you’re driving less miles, your likelihood of an accident goes down. While you’ll end up paying more in the event of a claim, you may save money in the long run if you have less accidents. On average, raising your deductible from $500 to $1000 will result in a 9% savings on your deductible. In Massachusetts, raising your deductible could net a 19% savings, while in Michigan, it’s a 4% discount.
Reduce coverages. If you’re carrying optional coverages such as collision and comprehensive, reassess your vehicle’s age, condition, and value to determine if these coverages make financial sense. For many car owners, this is a tough decision. You’ll want to factor in how much your collision and comprehensive premiums will cost per year, versus the value of your vehicle, and your own risk aversion. Remember, if your car is totaled, your carrier is going to pay the value of your vehicle, minus your deductible. If your car is only worth $3,000 but your collision and comprehensive premiums make up the bulk of your yearly premiums, you may save money over the years by dropping those coverages. If your emergency funds and risk-aversion are low, it may not make sense to drop collision and comprehensive.
Loyalty rewards and new business rewards. Does your carrier offer a loyalty reward? If you insure more than one vehicle or bundle your policies with other products such as homeowners or renters, you could save as much as 20% in premiums. Conversely, is another carrier offering a discount for new customers? They may be willing to beat your current carriers price. Find your best rates here!