Most of us can remember getting our first driver’s license, way back when we were sixteen, and taking the family car out for a first spin (or, if we were lucky, our own car). However, we might not remember what the insurance cost — many of us were covered under our parents’ policies. But auto insurance for teenagers is by far the most expensive for any age group — approaching $1,500 annually. Once you turn twenty, annual rates drop to below $1,000, and they continue to decline annually into our fifties, as long as we maintain good driving records. But after turning sixty, and especially seventy-five, rates begin to creep up again.
Seventy-five-year-old drivers still pay much less for auto insurance than eighteen-year-olds, but that’s probably only because they spend less time driving. The fact is, drivers in the U.S. over seventy-five have the highest rates of fatal daytime accidents. Our driving skills become impaired over time, and often the process happens so quickly we don’t even notice it. Many seniors discipline themselves to scale back their driving as they begin to lose confidence behind the wheel, at first foregoing expressway driving, for instance, then abstaining from driving on busy urban streets, until finally they limit themselves to quick trips to the corner grocery store.
Because driver’s licenses are issued relatively easily, routinely requiring only an eye test for renewal, seniors must make the effort themselves to monitor their driving skills, and keep them up. Senior driver safety courses are available in most towns, and the American Association of Retired Persons (AARP) offers a safety program for seniors through its local chapters. If you complete such a course, you can often get a discount on your insurance premium.
Increase Your Coverage
If you feel that your reaction times behind the wheel are slowing down a bit, you might want to increase your insurance coverage, even if you’re taking proper precautions such as slowing down and leaving adequate time to make turns. Liability insurance is required by law; this covers damage to another person’s vehicle and property if you are found to be at fault. Minimum coverage amounts vary from state to state, but are usually $25,000; you are responsible for amounts over that. If you total someone’s BMW but only have minimum coverage, you’ll be paying quite a bit out of pocket. You might think about getting covered for twice that amount; if you live in a wealthy neighborhood, it would not be unreasonable to have $100,000 of liability coverage.
Bodily injury liability, required in most states, compensates the driver and passengers in the other vehicle as well as passengers in your own car for medical injuries sustained in an accident that you cause. The main point here is to protect your assets against lawsuits that might arise from an accident. This insurance is sold in increments; “100,000/$300,000,” for instance, would compensate each injured person up to $100,000, but not exceeding $300,000 (i.e., three persons) per accident. How much coverage you need here depends on how much you have to protect in terms of assets; for many people, $100,000/$300,000 of coverage is a good ballpark starting figure.
If you are concerned about protecting yourself from lawsuits, then consider an umbrella policy. This would protect you from lawsuits filed against you for any reason, including auto accidents; a million dollars of coverage might cost you $150-$300 a year.
Comprehensive and Collision Insurance
Comprehensive and collision insurance are usually not required, unless you still owe money on your vehicle, in which case the lending institution will require it. This insurance covers damages to your own vehicle: comprehensive covers non-accident-related damage (such as vandalism or hailstorms), and collision covers damage from accidents. Make sure that your coverage is sufficient to fix your car, or to purchase a new car should your car be totaled. However, don’t overinsure — you don’t need $50,000 of collision insurance if you’re driving a twenty-year-old vehicle. In fact, if your car is virtually worthless and you don’t plan to replace it, you can probably forgo comprehensive and collision altogether.
Uninsured or Underinsured Motorist Coverage
Uninsured or underinsured motorist coverage is another line item in most auto insurance policies; this covers you or your passengers for medical expenses should you be injured by a driver either without insurance or with insufficient insurance, or who flees the scene. Given the prevalence of uninsured drivers, this insurance is recommended; $100,000 of coverage might cost $40 annually, and it will make up the difference for any costs your medical insurance doesn’t cover.
You can probably skip personal injury protection, which covers you and your passengers for medical costs regardless of whose fault the accident was. You are probably already covered by your health insurance policy.
Roadside Assistance-A Policy Extra
One policy extra you might look at, particularly as a senior, is roadside assistance. If you break down for whatever reason by the side of the road, you can call your insurer and help will be on the way. If you’re a member of the American Automobile Association (AAA) or some other driving organization, however, you may already have such coverage; don’t duplicate coverage.
Reduce Cost of Premiums
One way to cut back on the cost of premiums is to raise the deductible amounts on your policy — standards amounts that you pay out of pocket for each incident before insurance picks up the tab. A $100 deductible is usually standard, but you can raise this amount to $200 or $500 and save considerably on premiums. However, if you do have an accident, you’ll of course be paying more out of pocket.
More important than reviewing your auto insurance, think about ways to improve your driving as a senior. Minimize the distractions you may have routinely allowed yourself behind the wheel: checking your email, turning to face your passengers in conversation, wrestling with a Styrofoam carton of take-out ribs with a cup of hot coffee squeezed between your legs. Pay attention to right-of-way, and yield to other cars. Be doubly careful at intersections; don’t make a right turn on red unless you can see clearly that there’s no one coming. Make sure that your neck is supple enough to turn and check your blind spot before changing lanes; regardless of how good your mirrors are, there’s almost always a blind spot. And begin to maintain a little extra room between your car and the car in front of you, especially in slick conditions.
Finally, prepare yourself for the eventuality that you will ultimately no longer be capable of safely driving, and hand the keys over to another party. It may be a humbling moment, but at least you’ll no longer have insurance premiums to pay!