Auto insurance premiums can take a bite out any senior’s budget. Most states require drivers to have auto insurance in order to legally drive a vehicle, so going without insurance is not an option. Here are some tips to help seniors cut the high cost of auto insurance.
1. Shop around.
Get a quote from several companies before purchasing your policy. Premium rates can vary substantially between companies for the same coverage, so it always pays to comparison shop before you buy.
2. Ask for a senior discount.
Drivers between the ages of 50 and 70 are among the safest drivers on the road. If you are in this age group, ask for a discount.
3. Raise your deductible.
Raising your deductible will usually lower your auto insurance premium. With a higher deductible, you are assuming more of the risk of loss, which reduces the risk borne by the insurer. Before raising your deductible, make sure that you are not violating the terms of your car loan. Many car loans set the maximum permitted insurance deductible and you may be in default on your car loan if your deductible is greater than the allowed amount.
4. Consider dropping some coverage.
If you have an older vehicle, you may want to consider dropping collision or comprehensive coverage. Generally, if the market value of your car is less than 10 times the premium for collision or comprehensive coverage, then you may want to drop the coverage.
5. Keep a clean driving record.
Your driving record is a major factor in determining your auto insurance premium. Keep your driving record clean by obeying traffic laws, driving in a careful manner, and avoid drinking and driving.
6. Keep a good credit rating.
Most car insurance companies review your credit when determining your car insurance premium. Customers with bad credit can expect to pay as much as 50 percent more for their car insurance than customers with good credit.
7. Ask for a reduced mileage discount.
Many seniors, especially those who are retired, may not drive as many miles as younger drivers. Some insurance companies offer auto insurance discounts for drivers who drive fewer miles. If you do not drive a lot, you may want to see if you can qualify for a reduced mileage discount.
8. Take advantage of all available discounts.
Most insurance companies offer discounts for customers who have multiple policies. You may qualify for a discount by placing your homeowners insurance and auto insurance with the same company. Additionally, most insurers offer multi-car discounts. If you have more than one car insured with the same company, you may qualify for a discount.
Check to see if you qualify for a group insurance discount. Organizations such as AARP partner with insurance companies to offer insurance to its members. You may be able to achieve substantial savings by working through a group offering.
Auto insurance does not have to be a major expense for seniors. Seniors can keep their auto insurance costs down by shopping around, choosing the coverage that best suits their situation, driving safely, maintaining a good credit rating, and taking advantage of available discounts.