Sometimes, age pays.
That’s particularly true when it comes to car and homeowner’s insurance, where getting older — and wiser — can help trim your annual premiums.
Your Age and Insurance Deals
While you may no longer qualify for straight-A student auto insurance discounts, you could win reductions because of your driving habits, loyalty to the insurer (though this is tricky, as you’ll see below), job tenure, home-based work status and even retirement.
If you’re retired or now working from home, for example, you’re probably driving less than in the past, which translates into less mileage on your car, allowing you to pay less for auto coverage. Similarly, if you’re around the house more, “certain liabilities, such as break-ins or small fires that become big ones, are reduced,” says Robert Hunter, insurance director of the Consumer Federation of America. Consequently, many homeowner’s insurers lower their rates accordingly.
In particular, InsureU says, the golden age for “mature driver” discounts is between 55 and 70; after that, rates may rise because the risk of accidents increases.
What to Do to Get the Deals
To get these “mature” discounts, however, you may need to be proactive.
Start by asking your insurer or agent about ways to trim your premiums. Ask if there’s a loyalty discount for longtime policyholders, for instance. And if you’ve stopped driving to and from work, find out if you can pay less due to your lower annual mileage.
Here, the discounts may not be large — typically, 5 percent off auto, bodily injury and liability coverage. And in some states, online refresher courses aren’t eligible for insurance discounts.
Discount aside, a refresher course could be useful for learning how to adjust your driving habits due to the effects of aging.
How Shopping Around Pays Off
It’s also a good idea to comparison shop for auto and homeowner’s insurance every two or three years, seeking rates and discounts from rival firms to ensure you’re getting the best bang for your bucks. Doing so could save you about $125 on your car insurance and $100 on your homeowner’s policy, says Hunter.
He says some insurers may actually raise prices for long-term customers if they suspect the policyholders aren’t motivated to move their business elsewhere, which makes period comparison shopping especially important for older customers.
Loyalty Doesn’t Guarantee Savings
Don’t assume you’re getting a better deal because you have your auto and homeowner’s coverage from the same insurer, says Amy Bach, executive director of United Policyholders, a consumer-education nonprofit.
Some insurers promise a 5 to 15 percent reduction in your premium for buying two or more policies. “Even with that discount,,” sys Bach, “you might be able to get the same coverage at a better price by buying your home insurance from one company and your auto policy with another.” The only only way to know for sure is to get a few “apples-to-apples” quotes from competing companies.
5 Tips to Cut Your Insurance Costs
Whether you plan to stay with your existing carrier or switch, here are five more tips to trim your premiums by using your age and experience to your benefit:
1. Ask for a loyalty discount. Some insurers will reduce premiums by 5 percent if you’ve been with them for three to five years. Some cut rates 10 percent if you’ve been with them for at least six years, according to the Insurance Information Institute. If your insurer won’t grant you this discount, consider going to another that offers more competitive rates.
2. Consider dropping collision and/or comprehensive coverage if you’re driving an older car. The cost of this coverage may exceed the value of your vehicle.
3. Notify your auto insurer if you’re driving far fewer miles than in the past because you’re retired or working from home and no longer commuting. Driving less may well translate into a reduction in your premium.
4. Tell your auto and homeowner’s insurer if you’ve worked for the same employer for many years. You may be eligible for a discount due to your job stability.
5. Alert your homeowner’s insurer if you’re retired. Some companies offer up to a 10 percent discount to retired policyholders who are at least 55. Since every penny counts for retirees, this can result in valuable savings for years to come.
Next Avenue Editors Also Recommend:
- 5 Ways to Avoid High Retirement Health Costs
- Money Lessons From Hurricane Sandy
- 5 Expenses to Ditch in Retirement
- You Got a $10,000 Hospital Bill. Now What?
Next Avenue is bringing you stories that are not only motivating and inspiring but are also changing lives. We know that because we hear it from our readers every single day. One reader says,
"Every time I read a post, I feel like I'm able to take a single, clear lesson away from it, which is why I think it's so great."
Your generous donation will help us continue to bring you the information you care about. What story will you help make possible?