Car insurance for seniors and elderly people
As you enter retirement, you car insurance rates could go up or down, or maybe even stay the same, depending on your health and any discounts you're eligible for.
Published August 9, 2018|7 min read
Editorial disclosure
If you drive, you’re virtually guaranteed to need car insurance. Auto insurance covers your liability when you hurt someone or damage their property with your car, the costs of which can reach into the tens of thousands of dollars. You’re also required by law to have car insurance in 48 states before you get behind the wheel.
Your car insurance premiums grow and shrink the longer you’ve been a driver. When you’re young and just starting out, car insurance can be very expensive. But, after you hit age 25, and you’ve demonstrated a history of safe driving, your rates start dropping significantly. All things being equal, your rates may be at their lowest between the ages of 50 and 59.
As you approach retirement age, your car insurance rates start to go through some changes again. Depending on the insurer, your rates may plateau, go down, or go up. Car insurance for seniors and elderly people can become complicated because everyone ages differently, and you may be able to take advantage of certain discounts related to how you drive. Through your late 60s and on, your premiums will start to increase again, even with eligible discounts in place.
Read on to learn more about car insurance for seniors and elderly people:
How are car insurance premiums determined?
Car insurance premiums are for the most part determined by the amount of coverage you need. Think about how much you could afford to spend out of pocket if you’re liable for a car wreck or somebody’s medical bills, or if you need to repair or replace your own car. Your auto insurance should be enough to cover all or most of those costs.
Personal characteristics, like your age and gender, also affect your insurance premiums. If you live in a high-crime location, your premiums will increase. But the more driving experience you acquire, the lower your premiums will become, as long as you can demonstrate that you drive safely.
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Driving experience is such an important part of car insurance underwriting because carriers are looking to manage their risk. That’s why you pay more when you’re younger for car insurance than you would when you’re older. Rates begin plateauing as early as your 40s and may stay that way until well into the first years of your retirement.
By your late 60s, however, your rates may begin to increase dramatically. That’s because you may develop health concerns associated with aging that make it more difficult to operate a vehicle, such as vision loss and slower reflexes. The side-effects of some medications you take may also make driving difficult, which makes you riskier to insure for the insurance company.
Having a job could also increase your premiums. Driving to work and back home again every day means more time on the road, and an increased likelihood that you’ll be involved in a car accident. Once you retire, or take on more limited part-time work, your premiums may actually decrease.
Why auto insurance premiums decrease
Car insurance policies typically last for one year, after which you can renew your policy and get a better rate. Shopping around for car insurance is the perfect time to update your personal details with your insurer, which could result in lower rates. There are a number of reasons why car insurance may actually become less expensive for seniors and retirees.
You traded in your car for a cheaper one.
Cheaper cars are easier to insure, because they’re less expensive for the insurance company to replace, and their owners aren’t compelled to show them off in a way that might risk someone’s safety. You can still get car insurance for your Lamborgini, your BMW, or your Tesla, but it’ll cost more.
Your insurer automatically reduced your rates.
Some insurers will lower your rates after you’re retired, with no action on your part other than to update the insurer about your working situation. You may have to be over a certain age to qualify, but some insurers set the threshold as low as age 55.
If you take a part-time job in retirement, you may also be able to continue working and still qualify for the reduced premiums.
You live in Massachusetts.
Massachusetts offers a discount to people aged 65 and older. However, because your rates start going back up in your late 60s, you might not notice a huge difference in your premiums.
You’re driving less.
Aside from not having to commute to work every day, if you drive less in general, the insurer no longer considers you as risky as someone who has to be on the road more often. You’re usually considered a low-mileage driver if you drive about no more than 5,000 to 7,500 miles per year.
But beyond using just mileage as a risk indicator, some insurers will offer you lower rates if you only drive at certain times of the day. As someone’s vision and reflexes become impaired with age, driving at night becomes increasingly dangerous, which means that your premiums will be lower if you only drive while the sun is out.
If you plan to go long periods without driving, such as vacationing in Florida for the winter, you can also lower your premiums by reducing your coverage to just comprehensive insurance. Comprehensive insurance covers your expenses when your car is damaged or destroyed in a covered peril, including certain kinds of hazardous human activity and elemental conditions like fire and earthquakes. However, before you get behind the wheel again, you’ll need to restore your full coverage, so any decrease in premium rates may be temporary.
You shopped around for coverage.
If you’ve been a safe driver or are healthier on average than your age cohort, you might qualify for lower rates from another insurer if your current insurer won’t budge. Policygenius can help you compare auto insurance policies until you find one that fits your budget and needs.
Make sure any new policy you purchase is guaranteed renewable , which means the insurer can’t modify or cancel your coverage as long as you’ve been paying your premiums.
When auto insurance premiums go back up again
Although there are many ways to lower your premiums in retirement, seniors in their late 60s will probably see a rate increase as they settle into their golden years. That’s because insurers have determined that as someone’s health declines, he or she becomes more likely to get into an accident. According to the Insurance Information Institute, elderly people cause about as many accidents as teenagers.
By your mid-70s and 80s, car insurance may become prohibitively expensive, although if you followed the steps in the previous section, you may not feel too much pain in your wallet. Talk to your insurer about any options you have to make your coverage more affordable, and be sure to shop around if you don’t like what you hear. You could save hundreds of dollars per year by switching between insurers.
Car insurance discounts for senior citizens
While having more driving experience usually results in lower rates, you can reduce your premiums even further with discounts offered by your carrier.
Take a driver’s education course.
Driver’s education classes aren’t just for teen drivers. Seniors can also get a discount for their car insurance by completing eligible driving classes. These classes are offered by organizations like AAA, AARP, and the National Safety Council, or even by your state government, and may be offered in person or online. Confirm with your insurer that a given course is qualifies for a discount. Such classes may include:
Defensive driving course
Mature driver training course
Occupational therapy classes, if a serious medical conditions makes it difficult for you to drive.
You may have to be 55 or older to partake, and after a certain age, your state may actually require you to periodically take refresher courses in order to keep your driver’s license.
Add safety and security features to your car.
Installing safety and security features to your car is a discount you can get at any age, but there’s no time like the present. Some common additions you can make to get a car insurance discount include:
Airbags
Anti-lock brakes
Antitheft devices like a car alarm or LoJack
Car tracking and emergency services upgrades like OnStar
Usage-based driving.
In order to get the low-mileage discount, you may have to demonstrate to the insurer that you’re actually keeping your car use to a minimum. That could mean manually reporting your mileage and driving habits to the insurer, sometimes through a smartphone app.
Other senior drivers may be asked to use a device that plugs into their car’s onboard diagnostics system. Such a device records your speed, mileage, braking frequency, and the time of day you drive, among other measures of accident risk.
Organization discounts
This could depend on where you went to school, whether you served in the armed forces, or if you belong to certain groups. Although eligibility depends on your insurer, you may be offered discounts in the following categories:
Alumni discounts. Even if you graduated half a century ago, you may still be eligible for a discount just for having gone to certain universities.
Fraternity and sorority discounts. The same is true for having belonged to certain fraternities and sororities.
Armed forces discounts. Most insurers offer car insurance discounts to veterans.
Interest group-based discounts. Belongings to the American Automobile Association (AAA) or the AARP may result in a discount.
Zack Sigel
Managing Editor