You’re cruising into your golden years. Though you may have an impeccable driving record, it’s baffling (and infuriating) to see your auto insurance costs climb.
In your 50s and 60s, you might not have a problem, but as you reach your 70s or 80s, your insurance rate could become more expensive. That’s problematic because most people 65 years of age or older may have less income and may not drive as far or as often as they once did.
According to data from Employment and Social Development Canada, seniors in Canada are a rapidly growing segment of the population who are living longer and healthier lives than previous generations. In 2014, more than six million Canadians were 65 or older, representing 15.6% of Canada's population. By 2030, seniors will number more than 9.5 million and make up 23% of Canadians.
Data from Transport Canada, meanwhile, show more seniors aged 65 and older have died in traffic fatalities than any other age group across Canada, from 2000 to 2018.
As you get older, driving takes on new considerations and potential challenges, particularly when it comes to safety and the cost of car insurance.
Finding affordable seniors’ auto insurance
Age can affect the auto insurance rate you pay. The older you are, the more a particular age group could be considered risky to insurance providers.
Age groups are categorized together, and rates are based on claim and collision statistics. That’s why if you’re 70 or older, you might find your insurance rate becoming more expensive.
Auto insurance rates increase by milestone
Not every insurance company will raise rates for seniors, but some may consider older drivers a risk for a few reasons:
- You may have age-related changes to vision and hearing.
- You might experience a delay in reflexes from an age-related decline in motor function skills, or as a side effect from some medications.
- You might have a health condition that affects your driving abilities.
- For older drivers injured in accidents, the healing time can take longer. Hence, treatments and rehabilitation might be more expensive.
- While some insurance providers categorize seniors by age, not every company will do that. And some even have specific discounts that you might be able to get.
Here’s how your premium may be affected as you age:
Drivers in their 50s
In your 50s, you might find cheaper policies. If you have a clean driving record with no claims, you’re considered a safer driver with plenty of experience, and ideally, you’re in good health with fast reflexes. You also probably have good vision and hearing skills.
Drivers in their 60s
Once you reach your 60s, you may still have a lower premium if you have a clean driving record and no claims. If you see a slight increase in your rate, it might be time to comparison shop with other carriers. Why? Most people let their car insurance policies auto-renew. That means you’re not getting the best rate possible.
Drivers in their 70s
You might notice your insurance going up when you turn 70. That’s because you’re falling into a riskier age group. Insurance companies see the 70s as an age group that might have more collisions than middle-aged drivers. However, just because you turn 70 doesn’t mean you have to accept an increased rate. Some insurance providers will recognize your good driving behaviour and claims-free record and price your policy accordingly.
Drivers in their 80s and older
Another reason you’ll see rates go up in your 80s is that older drivers often have slower reflexes and longer recovery times after a collision, which can mean higher costs for claims. Not all insurance providers see things this way, which is even more reason to shop around.
Insurance discounts for senior citizens
Worried that your rate is increasing as you age? If you're a good driver with a clean driving record and no claims, there are a few insurance discounts you may be able to take advantage of as a senior to get a better deal, including:
- Find an insurance company that specializes in serving older groups or retirees. Some insurance providers may offer special discounts for mature drivers or have policies for seniors that aren’t age-based. Ask your current provider about the types of discounts they offer. For example, if you’ve never filed a claim or haven’t filed a claim in the past year, you might be eligible for a discount. Let your current insurance professional know you're comparison shopping. You can discuss your profile and you might find that you are eligible for a discount.
- Use an online auto insurance comparison tool. In retirement, you might be on a fixed budget. Hence, every dollar counts. That’s why an online car insurance comparison tool is handy. It can help you compare rates from the leading insurance companies in Canada. You can shop by the type of coverage you want and then contact a broker to lock in your rate. The benefit of using an insurance comparison tool is that you’re saving time and money. Instead of having to check in with every insurance company in Canada, you can view their rates all at once. You also get to select the best package and premium that fits your budget.
- Ask for a discount for a shorter commute. If you’re driving less as you transition into retirement, let your insurance provider know. They might offer a discount because you’re on the road less, which means there’s less chance you will get into a collision. If you’ve never had an accident and have never filed a claim, ask your insurance company about a claims-free discount. If they don’t offer one, check with other carriers.
- Combine your insurance packages. Another way to see a discount is with bundled insurance. Let’s say you have home insurance with one insurance company and auto insurance with another carrier. Ask one provider if they will give you a discount for bundling both policies with them. If that broker or insurance agent doesn’t offer a discount for bundled insurance, check with other insurance providers.
- Raise your deductible. If you’re driving less, it also may be a good idea to increase your deductible, provided you can afford it if you need to file a claim to repair your vehicle. A deductible is the amount you pay out –of pocket before your insurance company pays to cover your claim.
- Decrease or lose coverage you don’t need. Check your policy to make sure all the coverage and limits reflect your needs. If you own an older car (more than 10 years old), it may be worthwhile to reduce your coverage. For example, collision and comprehensive coverages, which are optional, correlate to the value of your vehicle. If your car isn’t worth much, it may be wise to drop them and save up for a new vehicle instead. Plus, if you have a second vehicle, you probably don’t need rental car reimbursement on your policy. Talk to your broker about it before you make changes.
- Enroll in a usage-based insurance (UBI) program. A UBI program lets your insurance provider monitor how you drive, as well as how far and how often you drive, through a mobile app on your smartphone or USB plug-in device in your vehicle. Based on telematics technology — a method of monitoring and gathering data from vehicles including location, driver behaviour, and activity — it is designed to encourage drivers to be more careful behind the wheel by rewarding them with a discount on their premium.
Are you ready to shop for the best insurance rate?
As a senior, you could see your insurance rate go up as you age, but if you're a good driver with a clean record and no claims, you might be eligible for different discounts. Talk to your insurance provider or broker about reduced driving discounts and bundling your policies. Then compare rates online to find the most affordable prices.