Personal Finance

Senior Driver? Don't Let High Car Insurance Rates Stop You

Getting older? Worried your car insurance rates are going to go up? While getting older isn't great for your auto insurance premiums, it is not necessarily a reason to panic. In fact, sometimes getting older can lower your rates or even qualify you for discounts you wouldn’t otherwise be able to get.

How Does Aging Affect My Car Insurance Rates?

We asked ourselves that question, and to get an answer we conducted a small study across five states to see what correlation age has with car insurance premiums. The study, which included states with a high population of seniors, like Vermont and Florida and states with a low population of seniors, like Utah, showed that age and premiums do not correlate one to one.

We found actually from the ages 30 to 60 your auto insurance rates actually fall, albeit, only slightly. The experience gained as a driver over decades pays off when you are in your 40’s and 50’s. It was when a driver got to be 70 years old did rates start going back up.

Between the ages of 60 and 70, rates shot up an average of 1.19x, or 19% compared to the 2% decrease between 30 and 60. Luckily for senior drivers, the rise between 60 and 70 is the biggest bump. Between the ages of 70 and 80, rates only increased by an additional 5% while between 80 and 90 they increased an additional 11%. Overall, between 30 and 90 rates increase by an average of 1.41x.

How You Can Still Keep Costs Low

Be aware that our rates were pulled from the same profile, the only thing that changed about our driver was his age. Meaning there there are things individual drivers can do to lower their rates as they age.

One method is to simply drive fewer miles per year, which can be a lot easier than it sounds. Many people retire after the age of 65, meaning if you commuted to work via car, you will not be driving nearly as often. We found that a driver who drove less than 7,500 miles in a year could save 5% on their premium than the same driver who drove 15,000 miles.

Another way senior drivers can cut costs is by taking a safe driver and/or accident prevention course. While those are usually associated with younger drivers, older drivers can take them as well and get up to 10% off their premiums. The courses are usually online and can be taken at your best convenience.

Lastly, a great way to save money is by using a company that offers a senior discount. While there are not many, Farmers and Allstate both offer senior discounts. Allstate’s “55 and Over” discount is for, as the name suggests, people over the age of 55 who are not looking for full time work. The discount can also tack off another 10% from your yearly premium.

If you were keeping track we just discussed three methods, which when totaled, can offer up to 25% off your premium. Considering the average price increase was 19% between 60th and 70th birthday, 25% off would actually end up having you pay less than you were. As always though, make sure you shop around to get the best possible deal from your local car insurance companies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.