Dear Savvy Senior,
Can you provide any tips to help seniors reduce their auto insurance premiums? I just got hit with a 15 percent increase on my car insurance and am looking for ways to save.
Fixed Income Frank
Dear Frank,
Unfortunately, auto insurance rates went up significantly over the past year as the pandemic eased and more Americans got back on the roads. But, there are plenty of ways to cut your premium. To find out what discounts may be available to you, contact your auto insurer and inquire about these options as well as any others that may benefit you.
Low mileage discount: Most insurers offer discounts to customers who drive limited miles each year, which is usually beneficial to retirees who drive less because they don’t commute to work every day. These discounts usually kick in when your annual milage drops below 7,000 or 7,500, which is significantly less than the typical 12,000 miles most Americans drive per year.
Drivers Ed discount: Many states require insurance companies to offer defensive driving discounts – between 5 and 15 percent – to drivers who take a refresher course to brush up on their safety skills. These courses, offered by AAA (aaadriver.online/register/roadwise) and AARP (aarpdriversafety.org), cost $20 to $30 and can be taken online.
Monitored driving discount: Many insurance providers offer discounts based on how and when you use your car. To get this, the insurer would provide a small monitoring device that you would place in your car to track things like your acceleration, braking habits, driving speeds, phone use and when you drive. Drivers are rewarded between 10 and 50 percent for safe driving 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.
Membership discounts: Organizations that you belong to can also lower your insurance premium. Insurers offer discounts through professional associations, workers’ unions, large employers or membership organizations such as AAA, the National Active and Retired Federal Employees Association, AARP, etc. You could even qualify for savings based on the college you attended or the fraternity or sorority you belonged to decades ago.
Bundle policies: If your auto policy is issued by a different company from the one insuring your life or home, call each insurer and ask if bundling the policies would be cheaper.
Improve your credit: You may be able to lower your car insurance premium by paying your bills on time and reducing the amount of debt you carry. Insurers look at how their customers manage credit to get an idea of risk and to price policies. Better rates are given to those with good credit scores, typically 700 or above.
Increase your deductible: While it’s not right for everyone, paying a higher deductible could save you big on premiums. For example, raising your deductible from $200 to $500 could reduce the cost of your collision and comprehensive coverage by 15 to 30 percent. Going to a $1,000 deductible could save you 40 percent or more.
Consider your car model: If you’re shopping for a new vehicle, call for an insurance quote before you decide what to buy. Some vehicles are safer and cost less to repair than others. Insurance companies collect data about each make and model and use it to determine how much to charge customers.
Comparison shop: To find out if your current premium is competitive with what other insurers charge or to help you look for a different provider, you should comparison shop. Online brokerages such as CarInsurance.com, TheZebra.com and QuoteWizard.com let you plug in basic details, such as your age and your car’s make, model and year, to compare rates from insurance companies.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.