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With Car Insurance Rates on the Rise, Here Are Several Ways Retirees Can Potentially Trim Their Premiums

As we’re all well aware by now, the impacts of the COVID-19 pandemic are still rippling throughout much of daily life, often stifling the push for things to get back to normal. But in some cases, “normalcy” is making a comeback. As the pandemic caused policy-holders to drive less, many insurance companies cut their rates and even offered rebates. If you’ve checked your auto insurance bills lately, you’ve probably noticed that those cuts are a thing of the past.

Rates are rebounding, and, if you’re not careful, that rebound—an 11.3 percent average rise over the summer compared to the year before—could bite you, especially with inflation on the march. Here at AgingOptions we like to keep our finger on the pulse of how such changes could affect our readers, so we found this article from Kiplinger, written by Katherine Reynolds Lewis, which gives retirees some very workable tips for keeping car insurance costs down in the midst of these unpredictable shifts. 

As Lewis’s article begins, “Remember those partial refunds auto insurers issued policyholders during the pandemic because fewer people were driving? It’s payback time.” If you’re looking for ways to save, we’ve summarized Lewis’ tips below, but more comprehensive details can be found at the original article.

Your Retirement Status Can Be Leverage for Discounts – Use It!

As Kiplinger points out, your status as a retiree can be leveraged in a few key ways. First, many car insurers offer low-mileage discounts for those eligible, and if you no longer drive to the office every day—or you work from home—you may very well fit the parameters. Lewis explains, “Most auto insurers offer [a discount] when your annual mileage drops below 7,000 or 7,500, which is significantly less than the typical 12,000 miles most Americans drive a year.”

A second way that you can leverage your age and experience is through discounts for safe driving. An unsafe driving history can seriously raise your rates, but a spotless record—or even an improved one—can work wonders. Auto insurance companies like to reward safe drivers, and they have been known to drop a premium between 10 and 15 percent if you can prove your safe-driver status. Proof typically involves taking a defensive driving course or utilizing insurance company-approved software or other technology to track your driving for an amount of time, but the discounts can be worth the hassle. (Bonus: this can apply to any younger drivers in your household, too, for further savings.)

Your Credit Score Can Help

A healthy credit score can be a boon, as well. We all know that a good credit score comes with a few perks, and one of them is possible lower car insurance premiums, since insurance companies are all about assessing risk. Paying your bills on time and reducing your overall debt can have a significant impact on how much you pay.

On the whole, it’s worth calling your insurance company to ask for any and all senior, safety, and other discounts available, since most companies offer at least a handful. You may also find that your memberships and affiliations—educational, professional, employer, military, and AARP—can save you bigtime. 

Increase Your Deductible, Decrease Needless Coverage

“It’s not right for everyone,” Lewis writes, “but paying a higher deductible could save you big bucks on premiums. For example, raising your deductible from $200 to $500 could reduce the cost of your collision and comprehensive coverage by 15 percent to 30 percent.” But she adds, “Just be sure to keep a cushion in your savings account so you can pay that higher deductible should the need arise.”

On the flipside, while most Americans are underinsured, it’s definitely a possibility that you are paying for superfluous coverage. As examples, Lewis states that “if you already own multiple vehicles, coverage that pays for a rental car when yours is in the repair shop is probably superfluous, and collision coverage may be unnecessary if your vehicle is so old that even a minor accident would likely result in the need for a replacement.”

That said, collision and/or comprehensive coverage is one area where you shouldn’t skimp without care, especially since many states have a minimum requirement. But looking with a more critical eye at your coverage can reveal areas of real savings.

Buy Your Car with Care

Keeping the insurance costs in mind when buying a new car can definitely take some of the glamour out of the process, but it’s worth it. Insurance companies keep track of the safety features and other data about a vehicle in order to calculate insurance, and some makes and models of cars and trucks are going to be pricier than others to insure.

But beware of hasty assumptions. It’s always a good idea to call your insurance company for a quote before making your final purchase, even if you have your sights set on a newer car with better safety features. Lewis explains that “newer cars with better safety features can be more expensive to cover because they rely on complex electronics embedded throughout the car.”

This can have unseen ripple effects. “Often,” Lewis says, “the sensors for some of those electronics are found behind the windshield, which must be specially made to both protect and work with the sensors. Don’t drop glass coverage for a car made in the last three to five years because windshields have gotten ridiculously expensive.”

Compare and Combine

Buying insurance shouldn’t be a “one and done” deal if you want to stay up to date with savings. Comparing your premiums to the premiums of other companies periodically is vital to making sure you’re ahead of the game and can potentially save you hundreds and thousands of dollars. When comparing, and before you decide to jump ship to another company, make sure you also check a company’s ratings to get a sense of how healthy the insurer really is. Cheap insurance is definitely not the best option if the company offering it is suspect for any reason.

If you decide to stick with your company, consider bundling policies together. Lewis advises, “If your auto policy is issued by a different company from the one insuring your life or home, call all three insurers and ask if bundling the policies would be cheaper.” Lots of insurance companies offer incredible deals for customers who bundle their home, renters, or life insurance with their car. But Lewis adds, “When you ask for quotes, make sure you are comparing similar levels of protection.”

It can take a bit of strategy, but you don’t have to be subject to the winds of change in insurance rates, especially in this unpredictable financial climate. Your status as a retiree can be a real boon to your financial health, so don’t be afraid to ask the right questions, do your homework, and save!

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At AgingOptions we believe the key to a secure retirement is the right retirement plan – yet statistics show that 70 percent of retirement plans fail. That’s why for nearly two decades we’ve been dedicated to the proposition that a carefully-crafted, fully comprehensive retirement plan is the best answer to virtually any contingency life may throw your way as you age.  Our slogan says it all: My Life, My Plan, My Way.

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(originally reported at www.kiplinger.com)

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