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When my retired dad moved to Florida, he was shocked to find out how expensive car insurance was there. As a senior, he doesn't drive much, and he didn't want to get stuck paying over $3,000 a year for full-coverage auto insurance.
Fortunately, since I write about insurance all the time, I was able to help him explore ways to save on car insurance for seniors, including bundling home and auto insurance, comparing quotes from multiple companies, signing up for a telemetrics program, and alerting the insurance company to how little he drives.
All the steps he took helped him bring his premiums down around 30% — and other retirees looking for affordable insurance for seniors may be able to reduce their costs as well.
Why do car insurance premiums change with age?
Car insurance premiums are set based on how risky it is to insure someone. The greater the likelihood of an accident, the higher auto insurance premiums will be.
Teenagers face the biggest risk of an accident since they're new drivers. They aren't always responsible, they're more likely to drive distracted, and their inexperience can lead to miscalculated maneuvers. That's why insuring teens is so costly.
As you get older, get more driving experience, and start to be more responsible, insurance premiums go down. That's why premiums tend to be cheaper in middle age.
Unfortunately, as you start moving into old age, your driving abilities may begin to suffer. You may have mobility issues that lead to delayed reaction time, vision issues that make it harder to see, slower reflexes, and reduced mental sharpness.
For all these reasons, older drivers have higher accident rates than middle-aged drivers, according to the Centers for Disease Control & Prevention. Because of this elevated risk, insurance premiums go up again. These higher costs can be a strain on seniors with fixed incomes, so finding ways to save on car insurance as a senior driver becomes essential.
Save on car insurance for seniors
Although insurance premiums become more expensive with age, it's still possible to save on car insurance for seniors. In fact, there are dozens of techniques to try, and the more of these methods you attempt, the more you may be able to save.
Keep a clean driving record
According to Geico, car insurance rates increase between 0% and 50% after an accident that you're at fault for. Premiums also increase if you get a speeding ticket, a DUI, a reckless driving charge, or any other moving violation. That's because any of these black marks on your record suggest an increased crash risk.
If you want to keep insurance costs affordable, do everything you can to avoid negative information on your license history. Obey the rules of the road, drive cautiously, and pay careful attention to what other drivers are doing to reduce your crash risk.
Get rewarded with savings for having a clean driving record.
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Enroll in a low-mileage program
The more you drive, the higher your risk of an accident. That's why many insurers offer low-mileage programs that allow you to save on insurance if you are an infrequent driver.
Typically, low-mileage discounts are available if you drive under 7,000 miles per year, although each insurer sets its own rules for who can qualify for this savings. This was one program my dad took advantage of, and this discount alone lowered his premiums by around 7%.
Sign up for a telematics program
Seniors are often pretty careful drivers. That's why they may be able to lower their auto premiums by signing up for a telematics program.
These programs usually involve installing an app on your phone or a small device in your car. The device monitors your driving and rewards you for things like avoiding night driving, staying off your phone while behind the wheel, and limiting hard braking or accelerations.
Progressive reports that users of its telematics program can save an average of $231 per year. Many other insurers offer similar programs, and savings will vary by company and will be based on your driving habits.
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Bundle insurance
Bundling insurance means buying multiple insurance policies, such as home and auto coverage, from the same insurer. This can simplify your life since you have only one insurer to deal with and reduces your costs as insurance companies reward your loyalty.
State Farm says the average savings for those who combine home and auto policies totals $1,273 annually since you're reducing the costs of both types of insurance. However, your own price reduction will vary based on your specific circumstances.
Adjust coverage
You don't want to buy too little insurance and be left unprotected, but you also don't want to buy too much car insurance because you'll overpay.
States require liability coverage, and you must buy at least the minimum mandated protection. It's also a good idea to get uninsured and underinsured motorist coverage, which most states require you to purchase as well. This pays for your losses if a driver harms you but has too little (or no) insurance.
There are other kinds of coverage you may want to opt out of, though. Collision coverage pays to replace your car if you cause a crash, and comprehensive coverage pays if something else goes wrong like storm damage. If you have an older car that's not financed and worth very little, these coverage options aren't always worth it.
Opting out of certain kinds of protection or raising your deductible (the amount you pay out of pocket before insurance kicks in) could help reduce your premiums, too, so consider what protections are worth paying for.
Compare insurance quotes
While it can seem like a hassle to switch car insurance, it can sometimes save you a lot of money.
Different insurers charge different rates — and impose different levels of premium increases — for things like being older or having an accident history. If you don't shop around, it's hard to know if you're paying a fair price or if there are cheaper options out there.
Aim to get quotes from at least three different auto insurance companies to find out which policy provides the best price. Just be sure you're comparing similar levels of coverage so you get the best deal.
Defensive driver course discount
Defensive driver courses can reduce the risk of a crash, so many insurers reward you for taking them.
Ask your car insurance company if completing an approved defensive driving course could help you save — though be sure to find out which classes are approved. You may be able to complete a defensive driving course online, but many require attendance in person. Completing this course could save you up to 15% as a defensive driving discount at Geico, depending on the state.
Improve your credit score
A limited number of states (California, Hawaii, Massachusetts, and Michigan) ban insurance companies from using credit scores as a rating factor when setting car insurance premiums.
However, throughout the rest of the U.S., your credit history and credit score will impact premiums because insurers have data showing that people with better credit are less likely to make claims.
Improving your credit can also help your finances in other ways, so take steps to boost your score, such as paying down debt and making sure to pay your bills on time.
Ask your insurance company about discounts
Finally, it's a good idea to ask your insurer if they offer any car insurance discounts that you may not be aware of or taking advantage of.
Most insurers offer discounts for things like memberships in certain organizations, being employed by certain companies, or having a history of military service. It's worth a phone call to find out if you qualify for any of these programs to help you save.
FAQs
Who has the cheapest car insurance for senior citizens?
No one car insurer has the cheapest auto insurance for seniors. Prices can vary based on location, marital status, accident history, and many other factors. Seniors should get quotes from at least three or four different insurance companies to make sure they are getting the best price.
At what age does car insurance go up for seniors?
Different insurers have different rules for when premiums start rising. However, most companies typically begin increasing premiums for drivers ages 70 to 75. Premiums go up for older motorists because they face an increased accident risk due to the effects of aging.
At what age do most seniors quit driving?
Health and ability affect when a senior should stop driving, not just a certain age. Some people can safely drive much longer than others. It's important to watch for red flags such as unexplained dents or scratches appearing on the car, becoming lost on familiar roads, or consistently driving too slow or too fast.
Bottom line
For retirees on a fixed income, it's worth exploring all of these different options to save on car insurance for seniors. Most of the tips are easy to implement and take little or no time at all, and the savings they offer can be well worth it.
If you're a senior who wants to lower your costs, compare insurance rates to find a policy that helps you protect against losses while keeping more of your money in your wallet.
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