It happens to the best of us. We get older. Unfortunately, as we age our reaction time isn’t as good as it used to be Senior Citizens, our eye-sight deteriorates, and we lose some of our driving abilities. This happens at different ages because some of us will not age as gracefully as others. Eventually, our insurance rates will start to go up to reflect our declining driving skills. So, what can we do about this?
First, and you’ve heard me say this before, shop your insurance. Different companies will treat aging in different ways. There is no single formula for developing prices for senior drivers. Companies select different age groups to start raising the factors that affect the price. For example, your dad is retired, and he has made it his “job” to find ways to save money. That’s the way he generates income. It takes some time, but make shopping fun and look at it as a way to increase your disposable income.
There are companies that focus on serving the needs of senior citizens. Find these companies and shop their prices. One such partnership is AARP/Hartford. AARP has partnered with Hartford Insurance Company and developed auto and home programs tailored specifically for members of AARP. There are specific discounts and services for senior citizens. You will need to be a member of AARP to take advantage of this program.
A word of advice: while you may think that being loyal to your current insurance company is important, that loyalty is blind. Although the company does not want to lose your business, you are being afforded little special treatment. In fact, most state regulatory agencies do not allow special treatment. All customers must be treated equally in the eyes of the law. So, go shop and see if you can save some money.
Lastly, nearly every company offers some type of Safe Driver Discount. To get it, you will need to take and pass a driver training course. Different programs are available through AARP and AAA. Usually, these tests can be taken online in the comfort of your home. It will take an hour or so and may cost you a nominal fee, but savings on your auto insurance could be as much as 10%.
In short, if you are a senior citizen follow these 3 steps: 1) shop, 2) look for companies who cater to people like you, and 3) take and pass a driver training course.
Why is There a Price Difference Based on the Kind of Car You Drive?
The kind of car you drive can have a big impact on the price you pay for insurance. Many insurance companies use complex pricing models to review potential loss costs of different vehicles. This means that the companies look at a variety of characteristics of your vehicle when determining what rate to charge you. Some of the vehicle characteristics insurance companies consider are:
- Age of the vehicle
- Value of the vehicle
- Performance features (engine size, tires/wheels)
- Custom Equipment
- Safety features
- Theft statistics
- Damageability and average repair costs
- Length of ownership
- Do you own, finance, or lease? Are you the original owner?
All of these factors go into setting the price you pay for insurance. Unfortunately, you probably don’t know how these factors impact your cars loss costs, so it would be hard for you to determine the impact on the price you pay. This is why it is always a good idea to get a new quote for your insurance before you buy a car.
It is fairly obvious that if you buy a newer, more expensive car your insurance rates will go up, but the impact the other factors on your rate is less obvious. That logic lies in the databases insurance companies review and compares to their loss statistics. Based on these factors the price can vary.
One question to consider when trying to lower the price paid for insurance is whether or not to purchase physical damage coverage (comprehensive and collision) for your car. If you have an older car that is only worth a few thousand dollars, it is probably not worth the premium paid to ensure the car. If you pay several hundred dollars for insurance and carry a $500 deductible, there will not be much of a pay-back should your car be damaged.
Are There Any Special Considerations if You Live in a Coastal Area?
Yes, if you live in Florida or in a coastal area that is exposed to hurricane and wind damage, you need to consider what impact switching your auto insurance might have on your home insurance.
If you live in one of these areas you know the difficulties of securing and maintaining an insurance policy on your home. Companies no longer have much appetite for writing homeowners in these exposed areas, and when they do it can be rather expensive.
Based on this coastal dweller need to consider the impact of switching your auto insurance on your other policies. If you move the companion auto policy to another company, your current company may attempt to cancel your homeowner policy or significantly raise the price.
Here’s a suggestion: go ahead and shop your auto insurance but before making a switch, contact your current insurance company and inquire as to what will happen if you cancel the auto policy. They should be able to give you some insight into the process and help you understand the consequences.
In all cases, it is important to shop your auto and home insurance as a package, not only to save money but to review your insurance expenses in total and find the best deal. The best deal might be splitting your policies between multiple carriers, or it might be keeping it all with one company. Review and understand your options and the implications prior to making a move.