The fact that Americans of Medicare age pay less on average for car insurance than most of their younger counterparts seems to say something good about the driving ability of older Americans.
Several searches of auto rates suggest men aged 50 all the way up to 75 pay less for auto insurance than men younger than 50 pay. Men over 75, meanwhile, have auto insurance rates comparable to men in their thirties. The situation is similar for women, who enjoy lower rates on average than men.
This paints a positive picture for people of Medicare age. However, even though they pay less for auto insurance than most Americans do, people 65 and over have experienced the same rate increases the rest of Americans have experienced. The Wall Street Journal’s Marketwatch reports that car insurance rates have increased by an average of 23 percent over the past five years.
Marketwatch offers a few tips to older drivers who are trying to keep their auto insurance rates and financial risks low.
Completing a driver safety course can result in a rate reduction, regardless of a driver’s age. The AARP offers such courses across the country, and safety courses have proven popular among older drivers who want to reduce insurance costs.
Marketwatch suggests making sure uninsured motorist coverage is included in your policy. While this will probably not lower your insurance rates, it will ensure that you will be covered if you have an accident and the driver of the other vehicle is uninsured. Some states have a surprisingly high percentage of uninsured drivers on the road.
This advice illustrates how having enough coverage is probably even more important than having inexpensive coverage. For example, if your liability coverage is not high enough, you may end up paying out of pocket for repair costs and medical bills if they exceed what your policy covers. Simply getting the amount of coverage your state requires may not be enough.
There may be such a thing, however, as having too much auto insurance. If you drive an older car, for example, you may wish to go without collision coverage. Waiving collision coverage eliminates the temptation to claim damages to your own vehicle. If your vehicle is an older, inexpensive one, it is often wiser to cover the damage yourself rather than filing an insurance claim, which is likely to boost your rate.
Auto insurance rates are not set simply according to age and driving history. The CoverHound.com blog outlines various factors insurance companies may consider in setting rates. According to CoverHound.com, renters, people with less education, and unmarried people pay more on average for auto insurance than people who own their homes, are college graduates, and are married.
This is not to suggest any unmarried person looking for the best auto insurance rates ought to rush out and get married. But it does underscore the fact that insurance companies have a lot of flexibility when it comes to setting rates—and rates can vary widely from company to company.
A point we’ve made repeatedly about Medicare supplement insurance applies equally to automobile insurance. Just as it is important to shop the market and compare Medigap rates before settling on a policy, it usually pays off to compare a variety of leading insurance companies’ rates before selecting an auto insurance policy.
Websites such as Autoinsurance.com and Bankrate.com make it easy for members of the Medicare population to shop the market for the best car insurance rates. Consumer advocate Clark Howard tells ABC News that consumers should check out new policies and rates at least once every three years.
The success many people have fine-tuning their Medicare coverage every year during the Oct 15-Dec. 7 Medicare Open Enrollment Period suggests it may even be advisable to review current auto coverage and weigh it against other coverage options every year.
There are other ways seniors may be able to save on auto insurance costs.
Marketwatch suggests policies offering “shrinking deductibles”—with your deductible getting lower and lower as you maintain a good driving record—may be worth looking into. “First-accident forgiveness” may also be something to ask about. And Howard suggests something as simple—but often forgotten—as asking for a rate reduction may pay off in some cases.
While some companies offer good driver discounts, keep in mind that they may not always bring this to your attention. Sometimes the key to getting the best rate is asking, asking, asking.
Some companies provide the opportunity to have a small, wireless monitor placed in your vehicle so that your driving habits can be tracked over the course of a month or so. Drivers demonstrating good driving habits over this time are often in a good position to get the best rates.
Most recommendations for getting the best auto insurance rates for seniors are similar to recommendations made to members of other age groups. For example, avoiding traffic tickets is sound advice for anyone. If you get a ticket for speeding or for some other infraction, you should try hard not to get another ticket too soon afterwards. Getting a series of tickets over the course of a year or two can drive up your rates.
It is also important not to let your auto coverage lapse, if at all possible. A period without insurance signals higher risk to insurance companies, and can increase your rates.
Overall, veteran drivers demonstrating a history of good driving and taking precautions such as those suggested here are in an excellent position to save money on auto insurance.
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