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Can you offer any tips to help seniors save on their auto insurance?
As auto insurance rates across the country continue to rise, drivers may face an even bigger increase once they reach their 70s, as insurers in some states take into account age-related changes in driving ability and the higher likelihood of physical injury in collision. Fortunately, there are ways you can reduce your premiums. To find out what discounts may be available to you, contact your auto insurer and inquire about these options.
Increase your deductible: Paying a higher deductible could lead to significant savings on your premiums. For example, raising your deductible from $500 to $1,000 can bring your annual premiums by 15% to 20% on average. Be sure you have sufficient savings set aside to cover the higher deductible if needed.
Adjust your coverage: Consult with your insurance provider to determine if adjusting coverage could help lower your premium while still providing sufficient protection. If you are driving an older vehicle that is paid off, you may want to consider removing collision or comprehensive coverage if your premium is more than 10% of the car’s value. Collision insurance covers damage to your car if you are involved in a crash or if you are the victim of a hit-and-run. Comprehensive insurance covers damage caused by acts of nature (such as storm damage), vandalism, theft or fire. If you are scaling back to liability coverage, make sure you have enough to pay for damages out-of-pocket if you are in an accident or your car sustains damage due to weather, theft or another non-collision event.
Take a defensive driving course: Some insurance companies offer defensive driving discounts – between 5% and 15% – to drivers who complete a refresher course to brush up on their driving skills. Courses are available online through organizations like AARP, the American Automobile Association and the National Safety Council. The cost of defensive driving courses can vary by state and course type, typically ranging from $15 to $150.
Report your mileage: Some insurers offer discounts to customers who drive limited miles each year, which is usually beneficial to retirees who drive less because they no longer commute to work every day. These low-mileage discounts usually kick in when your annual milage drops below 7,000 miles, though exact thresholds vary by insurance provider.
Bundle policies: If your auto insurance policy is issued by a different company from the one insuring your home, call each insurer and ask if bundling the policies would be cheaper.
Sign up for driver monitoring: Some insurers offer discounts based on how and when you use your car. They will monitor things like your acceleration, braking habits, driving speeds and phone use, which are monitored via a smartphone app or a device that plugs into your car’s diagnostic port. Drivers can be rewarded anywhere from 10% to 30% for safe driving. In addition, many insurance providers also offer discounts to drivers who have not had any violations or accidents for three or more years.
Ask about membership discounts: Many insurers offer discounts through professional associations, workers’ unions, large employers or membership organizations. You may also qualify for savings based on the college you attended or the fraternity or sorority you belonged to.
Improve your credit: You may be able to lower your car insurance premium by paying your bills on time and reducing the amount of debt you carry. Insurers evaluate at how customers manage credit to gauge risk set premiums. Lower rates are given to those with good credit scores, typically around 700 or above. However, insurers in some states ban or limit the use of credit scores to determine premiums.
Comparison shop: To find out if your current premium is competitive with other insurers, consider using online insurance marketplaces that allow you to compare quotes from multiple providers. You can also work with an independent insurance agent who represents several insurance agencies to help you compare.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of “The Savvy Senior” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
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