As you grow older, your car insurance requirements and costs undergo changes. Gaining insights into how senior car insurance works will help you maintain adequate coverage without paying excessively. Below are some top recommendations for car insurance tailored for senior citizens.
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The most affordable auto insurance for seniors can differ based on individual factors like driving history, type of vehicle, and geographical area. However, certain companies consistently offer competitive rates for senior car insurance.
A significant number of seniors enjoy lower car insurance premiums compared to younger age groups. Data from Progressive indicates that rates generally decrease after you turn 18, provided you maintain a clean record.
Individuals in their early 50s can expect to pay about 6% less on average than those in their late 40s. Those aged between 55 and 64 may witness an additional 9% reduction in their rates. Even seniors in the 65 to 74 age bracket may benefit from another 5% rate drop.
Typically, after 74 years of age, insurance rates begin to rise again. For drivers over 75, Progressive notes an average increase of around 5%.
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Even if you’re enjoying the most affordable rates of your life in your 50s and 60s, it is important to keep close tabs on your car insurance expenses, particularly if living on a fixed income. Here are five strategies, including discounts specifically for seniors, that can help maintain low insurance costs.
In Washington, D.C., and 34 states, insurance providers are obliged to reduce rates for seniors who successfully complete a state-approved defensive driving course. This defensive driving discount usually applies to individuals aged 50 or 55 and older, depending on state requirements. Specifics may differ, so it is advisable to confirm your eligibility and suitable courses with your insurance provider.
Some states mandate an in-person course, while others may permit online completion.
Bundling home and auto insurance with the same provider can significantly cut your premiums. If you rent instead of own a home, inquire about bundling with other policies like renters, RV, or boat insurance.
In many cases, you can reduce your car insurance costs by minimizing your annual mileage. The mileage limit differs by insurer, so confirming eligibility with yours is advisable. Additionally, you may need to report your car’s mileage yearly to validate your qualifications.
Pay-per-mile insurance options charge a fixed base rate and an additional fee based on your mileage each month. If you drive infrequently, the difference in cost between this and conventional car insurance could be significant.
Inquire with your insurance provider about additional car insurance discounts that might apply. For instance, paying your premium in full for the term usually qualifies for a discount.
Your insurance requirements can change throughout your life. The type and level of coverage you need as a senior is likely to differ from what was necessary in your 20s or 30s. By this stage, you likely have accumulated more assets that require adequate financial safeguarding.
Consider these coverage options to ensure you’re getting the best car insurance for seniors.
High liability limits are advisable for senior car insurance. Liability car insurance covers the costs of damages to property and medical expenses incurred by others in an accident you cause. Medical costs can be particularly high, with the average bodily injury claim reaching $26,501 in 2023, as reported by the Insurance Information Institute. Some claims may be even greater.
If damages exceed the limits of your liability coverage, you’ll still bear financial responsibility for the excess amount. Consequently, the minimal state-required liability limits are often inadequate. Ensure your liability coverage is sufficiently high to secure your net worth in case of a major lawsuit following an accident.
Consider collision and comprehensive coverage
Collision insurance and comprehensive insurance provide funds for repairs to your vehicle due to different incidents. Collision insurance covers most types of driving accidents, including collisions with other vehicles or objects, while comprehensive insurance protects against damages from non-driving incidents such as theft, weather damage, vandalism, fire, falling debris, or animal strikes. If your car is stolen and not retrieved, comprehensive insurance compensates you for its value. Note that both types of insurance come with a deductible for each claim.
Without collision and comprehensive coverage, you will not be able to file a claim to repair your vehicle if you’re at fault. If someone else causes damage to your vehicle, you can claim against their liability coverage for repairs.
Most auto insurance companies offer rental reimbursement insurance provided you have comprehensive and collision insurance. This coverage can help offset the costs of alternate transportation (up to specified limits) while your car is being repaired after an authorized accident.
According to Fidelity, the average rental car cost for an economy model can range from $49 to $78 per day, or up to $546 per week. Given that major repairs may take weeks, this cost can severely impact a fixed-income budget.
Gap insurance ensures that your outstanding auto loan is paid off if your vehicle is declared a total loss. This coverage can be especially valuable if you finance a new car with a small down payment and a sizable loan.
Your insurer may declare your vehicle a total loss if repair costs are deemed too high in relation to its market value. Rather than spending money on repairs, the insurance company will pay you its value, minus your deductible. Often, this amount is less than your loan balance due to the rapid depreciation of cars. Gap insurance covers any shortfall between what the insurance pays and what you owe on your loan, so you aren’t burdened with payments for a car you can no longer drive.
AARP offers car insurance for seniors through The Hartford, providing discounts for AARP members, online quote requests, and bundling home and auto policies. In most locations, AARP car insurance also offers optional features like accident forgiveness and a disappearing deductible program.
Amy Danise, Jamie Young, and Tim Manni edited this article.
