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Senior driver's guide to discounts

By Posted : 02/05/2015

If you're joining the millions of baby boomers leaving the world of work, it's the perfect time to take a look at your auto insurance to see how you can save money.

After all, you didn’t give up driving, just working.

Car insurance rates tend to be at their lowest when drivers are between 40 and 70. After that age, rates typically increase modestly. Senior drivers can make up for that increase by keeping their skills sharp and comparing quotes periodically.

The transition into retirement also can bring the opportunity for new discounts.

Look for low-mileage discounts

Retirement may mean an end to lengthy commutes and hours spent in rush-hour traffic. That alone can earn you lower car insurance rates. Ask your insurance company to give you rates as a pleasure vehicle rather than one used for commuting.

Many insurance companies will charge you less if you drive less, too.

Some will simply take your word for how many miles you drive each year, while others will monitor your driving behavior to determine your discount.

Safeco, for example, says you may qualify for a discount of up to 20 percent if you drive fewer than 8,000 miles a year.

Others offer pay-as-you-drive insurance, which requires you to plug in a telematics device that tracks things such as the number of miles you drive, how fast you drive, how you brake, and what hours of the day you drive.

For its Drivewise program, which monitors your driving, Allstate says you may be able to get a discount if you drive carefully and travel less than 25 to 30 miles a day.

As a low-mileage, low-risk driver, "you will qualify for a pretty decent discount," which could be more than 40 percent with some auto insurance companies, says Penny Gusner, Insure.com's consumer analyst.

Take a class to get a discount

Keeping your driving skills sharp also may earn you an auto insurance discount and be a key to getting cheap car insurance, says Brandt Minnich, vice president of marketing for Mercury Insurance.

According to the National Association of Insurance Commissioners, 34 states and the District of Columbia require your insurance company to give you a discount if you take an approved defensive driving class. Some of those states even allow you to take the class online.

Those discounts usually kick in if you're 55 or older and typically apply to liability insurance, according to the Insurance Information Institute.

The approved courses may include programs such as AAA's RoadWise Driver or AARP's Smart Driver Course.

Make your next new car safer

The right car for retirement should anticipate changes in your physical needs, and high-tech features in the newest cars have dramatically changed things for the better.

Crossovers and sport-utility vehicles are among the safest vehicles on the road. Their high seating position improves visibility and makes ingress and egress easier. But consider features such as rear-view cameras, blind-spot warnings and collision-avoidance systems that can keep you out of accidents – and an insurance claim – altogether. (See “The top 10 high-tech safety features for older drivers.”)

Consider who can drive your car

Even if you live alone, you might need to add another driver to your auto insurance policy.

If family members regularly borrow your car, or you have someone who helps you around the house and uses your vehicle, you should include them to your auto insurance policy.

You might be afraid that adding another driver will drive up your rates, but that isn't necessarily the case.

The other person's driving record is a major factor. So if your adult daughter drives your car and has a clean record, your premium may not change.

And if you don't add someone you should and he gets in a wreck, you run the risk of your insurer denying the claim because you misrepresented who regularly drives your vehicle, Gusner says.

There's no need to add someone who drives your vehicle once in a blue moon, like your sister visiting from out of state.

Should you keep someone away from your vehicle?

On the other hand, if you add certain people to the policy, such as your 16-year-old grandson, your premiums will soar.

Again, you don't need to add him if he drives your car infrequently. But if it's a regular occurrence, he should be included on the policy.

Your rates also could take a hit if you add a driver who has a bad credit score. That's one of the factors insurers consider when setting your rate, Gusner says.

Many states allow you to specifically exclude certain drivers from your policy, and they won't be covered by insurance if they drive your vehicle.

However, if you exclude your teenage grandson and an emergency crops up and you need him to drive you to the hospital, he'll have no insurance coverage, Gusner says.

Don't let others use your address

If you live in a safer neighborhood than your kids or grandkids, you might think you're doing them a favor by allowing them to register your vehicle at your address so they can get lower insurance rates.

But that's considered premium fraud or rate evasion, because your family members are paying lower premiums than they should.

If your family member gets in a wreck and your insurance company catches wind of the incorrect address, they'll likely launch an investigation, and the claim would typically be denied.

Review coverage for snowbirds

Snowbirds who flee northern climes or Canada each winter need to be sure they understand the auto insurance requirements at their home away from home.

If you live in Ohio and drive to Florida each year for a month or two a year, you won't need to make any changes to your policy.

But if you spend more than 90 days a year in the Sunshine State, you'll need to meet the state's minimum auto insurance requirements. Florida requires you to keep at least $10,000 in personal injury protection (PIP) and $10,000 in property damage liability coverage.

And if you leave a car in Florida year-round, it needs to be registered in Florida, instead of your state of legal residence.

If you keep your car in Florida, but register it in your state of legal residence, you're violating state law. (See more about car insurance requirements for snowbirds in Arizona and Florida.)

Think about when you should stop driving

While your car gives you freedom, you'll need to consider when it's time to no longer get behind the wheel.

Older drivers can have difficulty processing information and making decisions in complex driving environments, says Sandra Winter of the University of Florida's Institute for Mobility, Activity and Participation. That can mean problems on busy, multilane highways.

Often older drivers will realize they need to make adjustments and won't drive at night, on interstates or during rush hour.

If you won't curb your driving when you become a risk, family members will need to intervene, or erratic driving will draw the attention of police.

AARP has a list of 10 signs that you should stop or limit driving:

  1. Frequent close calls and almost crashing.
  2. Finding dents or scrapes on your car or other objects, such as fences and mailboxes.
  3. Getting lost in familiar locations.
  4. Having trouble seeing or following traffic signs and signals and pavement markings.
  5. Having a slower response time to unexpected situations or problems moving your foot from the gas pedal to the brake pedal.
  6. Misjudging gaps in traffic.
  7. Causing other drivers to honk or complain.
  8. Having difficulty concentrating while driving.
  9. Having difficulty turning to check the rear view mirror when backing up or changing lanes.
  10. Receiving multiple traffic tickets or warnings.
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