When it comes to insurance, getting older can cost you in more ways than one. In addition to health and disability policies getting more expensive, your car insurance premiums typically start to rise too as you hit your 60s—even if you have a stellar driving record.
Those hikes often come as a surprise, not least because during your 40s and 50s rates usually hold steady or even drop.
“I think most everyone knows that premiums are higher for young drivers,” says James Lynch, chief actuary at the Insurance Information Institute. ”There’s far less awareness that rates begin to climb for older drivers.”
Don’t take a higher premium personally—unless, of course, you’ve recently had an accident, received a ticket, or made another misstep. As with most insurer decisions, upticks in premiums are driven by data for millions of motorists over many years.
Those figures show that drivers as a whole, beginning in their mid-to-late 60s, grow more likely every year to have an accident and file an insurance claim. As the graph below shows, the rates for collision claims (on the driver’s vehicle) and liability claims (for damage to others’ property) reverse their steady decline beginning at age 60.
Since premiums are based on predictions for how much insurers will have to pay out, rates go up for these more accident-prone older drivers as a group.
Fortunately, not every company raises rates when you hit your 60s, and initial hikes are typically modest. In a survey of 20 companies, ValuePenguin.com found that premiums for a late-model Toyota Camry driven 12,000 miles annually rose by an average of about $50 a year between the ages of 55 to 65, from $1,690 to $1,737.
Those increases, though, soon escalate. Once you’re 65 to 75, the average hike adds a hefty $300 a year to your premium, pushing it to $2,037, according to ValuePenguin.
A survey by MyCarInsurance123.com yielded comparable results: The average annual premium jumped roughly $100, from $1,855 to $1,956 between the ages 55 and 65.
Fortunately, you can take a few relatively painless steps to recoup any age-based increases, or even reduce your premium even further.
Take fewer road trips
Drivers over 65 travel about 7,500 miles a year on average, the Federal Highway Administration reports. That’s a third or so less than how many miles the typical 55- to 64-year-old logs.
Since driving fewer miles lowers your risk of an accident, premiums typically drop when you spend less time behind the wheel.
For example, as a 60-year-old man driving a 2011 Toyota Camry, you could trim a $965-a-year GEICO policy by $75 by sticking to 7,500 to 9,000 miles a year. With a similar policy from Liberty Mutual, driving no more than 10,000 miles would take about $50 off a $1,728 policy.
Monitor how well you drive
Self-reported mileage is notably inaccurate, which can limit how much you can cut your premium. A more reliable way to measure yours miles is to agree to have your driving monitored, using either a device that’s installed in your car or an app you download to your smartphone.
Most such “telematics” programs monitor how well you’re driving too, including your speed and how rapidly you brake and accelerate. The insurance company then uses this data to determine the risk you pose behind the wheel.
Almost all the major insurers have these types of policies, including Allstate’s Drivewise, Progressive’s Snapshot, and Nationwide’s SmartRide. Switching to one can be especially valuable if you drive less than most, and more safely. (With some carriers, however, you run the risk of a higher premium if you drive more than expected.)
There are also two upstart monitor-only insurers. Metromile is strictly a pay-as-you-go service. Your driving behavior isn’t recorded, and you’re billed a monthly flat fee plus a charge for every mile you drive.
Root bases its rates more on how well you drive than how far you go. Both companies do, however, consider your age, driving record, and other personal factors, just as traditional insurers do.
Drop unnecessary coverage
If you own an older car, see if you are still carrying optional coverage on damage or loss to the vehicle—what’s known as “collision and comprehensive”—and at what cost. Then check the current replacement value of your car using Kelley Blue Book.
If your car’s value is at or less than 10 times the cost of your “C&C” premiums, you’re spending more than the likely benefit, so you can drop the coverage.
Even if you retain it, another money saving move is to increase your deductible, which could easily reduce your C&C premium by 10% to 15%, according to Lynch.
Go back to school
While the term “drivers ed” may evoke the basic training you received in high school, this class for older drivers is more like a refresher on best practices, including tips to help you compensate for reduced reaction times and other consequences of aging.
Both AARP and AAA offer online courses, available even to non-members, that typically take six or so hours to complete and generally cost $20 to $30. If you’re old school, Roadwise, the AAA program, is offered in classrooms in some cities.
In most states, completing these or other approved courses confer a mandated reduction in your premiums, typically of 5% to 10%, at least for the liability portion of your policy.
Be a bargain hunter
Simply shopping around for auto insurance whenever your policy is up for renewal can be a cost-saver. “All those ads about saving money with a few minutes of comparison shopping may seem like hype, but [the process] actually works,” says the III’s Lynch. Not every insurer will treat you as the same risk—or charge you the same amount.
For example, a search for a policy for a 60-year-old male produced online quote that spanned a difference of more than $800 a year for coverage that was comparable.
Robert Passmore, an assistant vice president at the Property Casualty Insurance Association of America, echoes that advice, saying that the “times when you have changes in your life or your driving, like when you retire, are ideal times to shop around.”