Car Insurance for Retirees

Since insurance companies consider older drivers to be a higher risk, rates often rise for retirees. There are things you can do to lower your rates, such as making sure you're getting all of the discounts you're entitled to.

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UPDATED: Jul 13, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jul 13, 2022Fact Checked

Here's what you need to know...

  • Insurance rates are based on several factors, including age
  • If you are taking early retirement, you may not be old enough to see a rise in your insurance rates yet
  • Retirees may qualify for certain discounts on their car insurance, such as lower annual mileage rates and driving classes for seniors

Whether you have built up a sizable amount of savings for your golden years, or are worried about finances when you retire, one thing is true for every retiree — being careful with money is extremely important. You might be wondering if your car insurance rates will drop because you are no longer commuting to work or will they rise because you’ve hit a certain age. Keep reading for more information on the best car insurance for retirees and if you qualify for lower rates.

Retiree Car Insurance Costs

In order to understand how your rates may or may not change once you retire, it’s important to look into how insurance companies decide what rates to charge clients. In a nutshell, your rates will rise or fall depending on how large of a risk your insurance company determines you to be. 

If your insurance company feels you are more likely to file a claim, it may consider you to be a higher risk, and thus someone who needs to pay more. 

The following are some factors your insurance company will use to determine how much to charge for your car insurance rates:

  • How old you are at the start of your policy period
  • Your gender
  • Your driving record
  • Average miles you drive each year
  • The type of car you drive
  • Your age and how long you have driven
  • The amount of coverage you have on your policy

The best car for retirees hoping to save on car insurance might be a Subaru Outback or Honda CR-V, as these vehicles rank as some of the cheapest to insure.

As you can see, some of these determining factors are controllable, like which car you drive, if you maintain a safe driving record, and what your policy includes. But others, like your age, are really not changeable.

It’s also wise to get quotes from multiple companies and compare them. GEICO and State Farm offer retirees fairly reasonable rates, but you should review as many quotes as you can.

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How Your Age Impacts Your Car Insurance Rates

If you know any teenagers, you may have heard them or their parents complain about how much it costs to insure them. While it is correct that young teen drivers have the highest car insurance rates, the average rate for 16-year-old boys is around $240 a month. Unfortunately, older adults come in second place. 

By the time senior citizens reach age 69 or so, their retiree car insurance rates tend to increase. This is because, according to car insurance companies, older drivers tend to be riskier and are more likely to file a claim.

Will my rates go up when I retire?

The answer to this question depends on several factors. For instance, if you retire early because you are in a profession that allows retirement in your 40s, you will not have reached the age where insurance companies feel you are automatically a riskier client. 

However, if you are waiting to retire to take full advantage of your Social Security and other benefits, which the Social Security Administration starts at age 62, then yes, your age may mean you will pay more for your car insurance in your golden years.

Is there anything retirees can do to lower their rates?

Fortunately, there are steps that drivers in their mid-to-late 60s and beyond can do to keep their rates lower and make sure they have the best auto insurance for retirees. For example, you might want to start by contacting your insurance company to inquire about any special discounts for seniors who take a driver safety class.

During the phone call with your agent, mention your upcoming retirement and the fact that you will no longer be working outside of the home, so your annual mileage will decrease. You will probably be asked to give an estimate of how many miles you anticipate driving each week, month, or year. Depending on your reply, you may qualify for a low-mileage discount.

Final Thoughts About Car Insurance for Retirees

After working for so many years, retirement is a big deal and an occasion that is worthy of celebration. In order to make your nest egg stretch as far as you can, it is worth the time and effort to look for ways you can lower your bills, including what you pay for retiree auto insurance. 

While your age might make your car insurance rates rise, other factors like taking certain classes for seniors and driving less may cause the rates to fall, which would be great news as you enter into your retirement.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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