“Smart Tips for Seniors to Lower Car Insurance Costs”

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Reassess Your Coverage Needs

Retirement often brings changes in your driving habits and possibly the car you drive. You might be driving less, downsizing to a smaller car, or paying off your current one. It’s a good time to review your insurance needs to ensure your current policy is adequate. You may find you’re paying for more insurance than necessary.

Talk to your insurer to identify ways your coverage could adjust to your new driving circumstances. Here are some factors of your auto insurance policy you might review:

Coverage Level

If you’re driving less, you may not need high levels of coverage. With a reduced likelihood of a serious accident, consider lowering your bodily injury coverage amounts. Conversely, you might opt for higher liability limits to protect your assets if you’re involved in an accident and the other driver sues you.

Type of Insurance Carried

Review the types of coverage you carry to determine if they’re still needed. If you’re no longer making payments to a lender or leasing company, you might consider dropping comprehensive and collision coverage from your policy. However, comprehensive insurance is fairly affordable and may be a small price to pay for protection against theft, weather-related events, and other damage your car sustains when you’re not driving it.

Annual Mileage

If you’re driving less, you may qualify for lower premiums. Reduced driving decreases the likelihood of getting into an accident and filing a claim for vehicle damage.

Type of Vehicle

The type of car you drive can impact how much you pay for auto insurance. Downsizing to a smaller economy car could lower your premiums, especially if your current car is a more expensive luxury vehicle. However, newer vehicles tend to carry higher premiums since the costs for repair and replacement are typically higher than for older vehicles.

Alternative Coverage

Many auto insurers offer alternatives to traditional insurance to help you stay on budget, such as pay-per-mile insurance rates and usage-based coverage. If your driving mileage is low, these policies may work in your favor. With pay-per-mile insurance, you’ll typically pay a set rate for every mile you drive on top of a base premium. Usage-based insurance policies are broader in scope and may reward you for safe driving habits.

Consider Your Changing Financial Situation

Dialing in your coverage needs is an essential step to make sure you’re only paying for the insurance you need. It’s also critical that coverage fits into your retirement budget. According to Progressive data analysis of customer policies, car insurance rates drop in your 50s and 60s before increasing at about age 75. For example, premiums for policyholders ages 55 through 64 dropped 10% but increased 4% for those over 75.

Generally, retirees living on a fixed income must reduce their costs to live comfortably within their budget. One primary expense to consider reducing is auto insurance. Here are some ways to make sure you’re not overpaying for extra insurance coverage you no longer need in retirement:

Review Your Deductibles

Increasing your deductible is one of the best ways to lower your car insurance premiums. If you have sufficient savings to cover a higher deductible if you file a claim, talk to your auto insurance agent about how much raising your premium might save you.

Ask About Discounts

Ask your agents what discounts you may qualify for that may significantly lower your premiums. For example, GEICO offers discounts of up to 22% on most coverage if you’re not involved in an accident for five consecutive years. You may also qualify for other discounts, such as:

• Military and federal employee discounts
• Multi-policy discount
• Defensive driving discount
• New vehicle discount
• Air bag, anti-lock, and anti-theft system discounts

Contact Other Insurers

Reviewing your auto insurance options regularly, ideally once every year, and getting quotes from several insurers can help make sure you have the most cost-effective policy.

Factor Your Location

You may be eligible to get a lower rate if you’ve moved to a new area since auto insurance rates vary widely from state to state.

Shop Around and Negotiate

Follow these steps to save on auto insurance so you can spend more of your money enjoying your retirement:

Get Quotes from Multiple Insurers

Requesting quotes from at least three auto insurance carriers can help you find the best rate. Most insurers offer quotes on their websites, over the phone, or in person at an office location. Independent agents aren’t tied to one insurer and can check rates and coverage options with several companies at once.

Review Your Quotes

The best way to get an accurate quote comparison is to make sure they’re for the same coverages—apples to apples. Keep in mind, your state likely requires you to carry liability insurance. Similarly, if you’re financing your vehicle, the lender or leasing company typically requires you to carry full coverage, including collision and comprehensive. Make sure your lender’s car insurance requirements are accounted for in your quotes.

Check for Discounts

Another way to lower your car insurance costs is by taking advantage of policy discounts. Many discounts are designed specifically for seniors, including mature drivers, low-mileage, and defensive driving discounts. You might also qualify for discounts through organizations you belong to, such as business, military, or membership groups.

Many states allow auto insurance companies to use credit-based insurance scores when calculating your rate. While this score differs from traditional credit scores, it includes many of the same scoring factors. You may want to review your credit report and credit score for free to address any issues you discover before shopping for car insurance rates.

When you’re ready to get policy quotes, consider streamlining the process with Experian to receive multiple free quotes in minutes.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you find the best solutions for your financial future.

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