By Jim Miller
Dear Savvy Senior,
I’ve read that many car insurance companies offer a variety of discounts to older drivers when they retire or reach a certain age. What can you tell me about this?
Most auto insurance companies offer policyholders a wide variety of discounts, many of which can benefit retirees. Auto insurers love older drivers because they’re experienced behind the wheel and they drive less than younger age groups, which makes them a lower risk for accidents and a safer bet for insurance companies.
While discounts will vary by insurer, many of these benefits can reduce your overall premium by 15 to 20 percent or more, and you are usually allowed to combine discounts to increase your savings. Note that combined total discounts are still often capped at around 25 percent.
To find out what discounts may be available to you, contact your auto insurer and inquire about these benefits, and see if there are any others that may benefit you.
Many auto insurance companies offer a general “senior” discount that will reduce your premium just because you’ve reached a specific age. The actual name and amount of the discount will vary by insurer.
Allstate, for example, provides a “senior adult discount” of up to 10 percent to drivers who are at least 55 years old and aren’t actively looking for full-time work. And Liberty Mutual offers a “newly retired discount” to drivers who reach that employment milestone, regardless of age.
Low mileage discount
Most insurers offer discounts to customers who drive fewer miles each year, which is often beneficial to retirees who drive less because they no longer commute to work daily. The fewer miles you drive, the lower your odds are of getting into an accident.
The parameters of low mileage differ by insurer, but generally about a 10-percent discount is available for driving less than 5,000 to 8,000 miles each year, although smaller discounts may also be available to seniors who drive more than this, but stay under 15,000 driven per year.
Driver’s Ed discount
Many states require insurance companies to offer “defensive-driving” discounts to drivers who take a refresher course to brush up on their safety skills. The discounts vary, and can save you between 5 and 15 percent.
Driver safety courses are inexpensive, can cost as little as $20 to $30 and can often be taken in a classroom or online. To locate a class, contact your local AAA (www.aaa.com), which operates a Driver Improvement Course for seniors, or AARP (www.aarp.org/driversafety, or call 888-227-7669), which offers the Smart Driver Course to members and non-members.
Club member or association discounts
Insurers offer discounts to members of clubs and associations with which they have partnerships. These could include professional associations, workers’ unions, large employers or membership organizations such as AAA, the National Active & Retired Federal Employees Association, the Seniors Coalition, AARP and more. You could even qualify for savings based on the college you attended or the fraternity or sorority you belonged to decades ago.
Safe driving discounts
Many insurance providers now offer discounts based on how and when you use your car. To do this, they would place a diagnostic device in your car that transmits wireless data on how you drive to the insurer. The device can measure how fast you’re going, how hard you’re braking, when you drive and how much you drive. Insurers then reward drivers through price adjustments for safe driving, low mileage and for not driving late at night.
In addition, many insurance providers also offer discounts to drivers who do not have any violations or accidents for three or more years.
Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.