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Insurance Costs For Those Retired

Here's what you need to know...
  • Car insurance for seniors may increase
  • As people age, their reflexes slow
  • Your individual rates will be based on a number of individual factors
Many people don’t consider their car insurance rates when they approach retirement age; however, they should.

The national average annual rate for car insurance for people who are retired is $917.65. This is less than the national average for someone who isn’t working, but isn’t retirement age; only $17 less, but still, it’s a savings.

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In fact, these rates are among the most affordable in the nation if you compare them with people of various occupations. Scientists pay the lowest amount for auto insurance at $870.20 a year; only a $47.45 difference in cost.

A Big Myth Associated with Auto Insurance and Retirement

AdobeStock_8217879-1600x1600One of the most common myths regarding auto insurance rates and retirement is that your rates will automatically increase because you are an older driver.

The truth is that as you grow older, you will see an increase in your auto insurance rates; however, when you retire, you should see a decrease in those rates.

The reason for this is as you get older, your reflexes slow down. This isn’t picking on people over the age of 65; it is just a simple fact of life that as we age our bodies slow down.

As such, when you are still working and you are in this age group, the car insurance company views you as a higher risk driver.

Not as high as a teen driver, for example, because you do have experience on your side, but certainly higher than a 40-year-old driver who has experience but whose bodies aren’t misbehaving, as much, so far.

With that being said, when you retire the assumption is that you are going to be driving less. This will lead to a decrease in your rates, and often a significant decrease.

Of course, there are a number of other factors that will go into determining how much you will pay for your insurance that may negatively or positively affect your overall costs.

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Factors Determining Rates

If you are a retired person and you plan on traveling extensively and you are going to do all of the driving, then you aren’t going to see a decrease in rates; in fact, you might see an increase.

In addition, if you plan on driving an RV or a bus as you travel, then the insurance companies are going to consider you an even higher risk and increase your rates even further.

The good news is that if you have an impeccable driving record, then your rates won’t increase as much as they would if you had a terrible driving record.

Conversely, if you have a bad driving record already, your rates could easily become unaffordable.

As part of the determination of what your rates might be, the insurance company is going to ask you how much you plan to drive.

They have considerably lower rates for people who drive less than 12 miles a day because, according to RITA (Research and Innovative Technology Administration) and the Bureau of Transportation statistics, the average American drives 29 miles a day.

In addition, where you choose to live will help the insurance company determine your rates.

If you choose to live in a sleepy little town with less than 500 people where crime is low and car theft is non-existent, you will pay less than if you choose to live in a metropolis that faces high car theft rates as well as other crimes.

Each insurance company has their own factors that they use to determine your rates. These factors can include:

Saving More Money on Your Auto Insurance

AdobeStock_17688255-1600x1600Just because you’re an older driver, or you are already saving money because of your retirement status, doesn’t mean that you can’t save even more money. You need to ensure that you take advantage of every discount offered by your insurance company.

You can get discounts for:

  • Safe driving
  • Long-term customer
  • Limited driving
  • Safe car
  • Anti-theft features
  • Good credit
  • Having a degree
  • Being married

In addition, saving money means shopping around. You can save a lot of money just by ensuring that you take time to compare rates!

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