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Imagine getting a note like this:
My husband is 74, I’m 72, and neither of us has had a ticket or an accident in decades. Our car insurance renewal just came in higher than last year’s. Then I read that car insurance prices are actually falling. What gives? Is it because of our age? — Judy
Judy and her husband, Hal, are made up. But their question is a common one, and it deserves a straight answer.
First, Judy’s right about the national numbers. The government’s measure of car insurance prices fell 5.0% in the 12 months through September, according to the Bureau of Labor Statistics. (1) Over the same period, prices for vehicle maintenance and repair rose 5.8%. (1)
But a national average isn’t your bill. The National Association of Insurance Commissioners notes that prices can differ among companies, and that factors such as the number of miles you drive can affect your premium. (2)
Your age is part of the picture, too. Crash data on older drivers is mixed. According to the Insurance Institute for Highway Safety, drivers 70 and older have higher fatal crash rates per mile traveled than middle-aged drivers. (3)
The same research shows the picture isn’t all bad: fatal crash involvement rates per licensed driver for people in their 70s dipped below those of drivers ages 35 to 54. (3)
I’ve been writing about money for more than 35 years. Here are 5 things Hal and Judy can do right now.
1. Ask what changed on the renewal
Call your agent or insurer and ask a simple question: What changed? Was it your rate, your coverage, a discount that dropped off or something about your car or ZIP code?
You can’t fix what you don’t understand. And sometimes the answer is a discount that can be put back on.
2. Compare quotes from several companies
Even if you’re happy with your insurer, it’s worth checking. The NAIC puts it plainly: “It pays to shop around before buying insurance, since prices can differ among companies.” (2)
Comparing quotes used to mean an afternoon on the phone. It doesn’t anymore.
For example, Insurify lets you compare real-time quotes side-by-side without the spam.
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3. Take a mature-driver course, then ask for the discount
Some states, including Florida and California, encourage safety courses for older drivers.
In Florida, for example, state law requires insurers to provide “an appropriate reduction in premium charges” on certain coverages when the principal operator is 55 or older and completes an approved accident prevention course. The reduction lasts three years. (4)
California’s DMV also lists mature driver improvement courses “designed for drivers 55 and older.” (5)
Rules vary by state, so call your insurer before you sign up and ask whether a course would earn you a discount and how much.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
4. Right-size the coverage on an older car
The NAIC says you may be able to reduce your costs by raising the deductibles on physical damage coverage. It also suggests considering lowering or eliminating physical damage coverage on older vehicles, unless a lender requires it. (2)
That makes sense if your car is worth a few thousand dollars and you could handle replacing it. What I wouldn’t cut is liability coverage. If you’re retired, you likely have savings to protect.
5. If you’re driving less, say so
Retirement often means no more commute. Since the number of miles you drive can affect your premium, make sure your insurer has an accurate estimate. (2)
While you’re reviewing what you pay for, look beyond the car. Other bills tend to creep up, too.
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My honest take
A clean driving record is worth a lot, but it’s only one piece of what goes into your premium. When the bill goes up, don’t assume it’s personal, and don’t assume you’re stuck with it either.
Ask what changed. Compare. Take the course if your state rewards it. And make sure you’re paying only for coverage you actually need.
An hour of homework once a year is one of the easiest raises a retiree can give themselves.
Sources: 1. Bureau of Labor Statistics; 2. National Association of Insurance Commissioners; 3. Insurance Institute for Highway Safety; 4. The Florida Senate; 5. California DMV
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