Car Insurance For Pensioners

In this article you’ll learn some tips that pensioners can use to find the right car insurance policy for their needs.

Car insurance for Australian seniors

Insurers calculate premiums based on risk¹. Similar to young drivers, insurers consider older drivers to be ‘higher risk’, and may begin to increase your premiums accordingly. This means that you could start paying more, even with a safe driving history several decades long.

A driver’s risk changes depending on their age, for example:

• Under 25’s usually pay higher premiums as they’re considered higher risk²
• Once a driver reaches 25, the risk of them causing an accident begins to reduce, which can lead to better deals on their premiums
• Drivers between 30 and 59 are in the lowest risk categories¹
• Once you reach 60, driver risk starts to increase
• Drivers 75 and over are considered higher risk than 18 to 21 year olds

Despite this, seniors have a lifetime driving history that could be used to their advantage. They also receive senior discounts in many areas, and it may be possible to find an insurer that also offers these³.

How does age affect my premium?

Senior drivers are considered high-risk for very different reasons to young drivers. Whereas young drivers often display unsafe driving behavior¹, senior drivers are often more cautious and try to avoid risky situations by regulating their own driving behaviour.

Instead, the risk comes from physical and mental changes that occur as we age, for example¹:

• Reduced sight
• Reduced hearing
• Reduced strength and flexibility
• Slower reaction times
• Medications that cause drowsiness

You may be able to delay premium increases if you have a safe driving record and maintain good health. However, once you turn 60, it’s a good idea to review your car insurance to make sure your premiums aren’t unnecessarily high. You may not be receiving all the benefits you could be, or you may find that another insurer offers a better deal.

Licensing regulations by state

As a senior driver, you’ll likely face licensing restrictions depending on which state you live in. Here is a breakdown of restrictions by state:

Queensland

QLD has a strict requirement that every driver 75 and over needs to carry a “medical certificate for motor vehicle driver” form whenever they drive⁴. Drivers face fines if they don’t present it when asked.

The form:

• Is in two parts: one for you to complete and one for your doctor
• Must be completed annually during a medical assessment
• Is usually valid for 13 months
• May be valid for a shorter time when medical conditions need regular reviewing

New South Wales

In NSW, the following regulations apply⁵:

• Drivers 75 and over must have a medical assessment every year
• Drivers 85 and over must also take a practical driving test every two years to keep an unrestricted licence
• Drivers 85 and over can opt for a modified licence to avoid having to take the practical test

Australian Capital Territory

In the ACT, drivers 75 and over must have an annual medical assessment. Drivers must legally report any medical condition that may affect their driving⁶.

Victoria

While there is no requirement for senior drivers to pass regular medical assessments in Victoria, you must legally tell VicRoads about any conditions that could affect your driving as soon as possible⁷. You may then be required to attend regular medical assessments.

Tasmania

The Tasmanian government recognises the importance of maintaining a driver’s licence as you get older, so they have minimal rules in place for senior drivers⁸:

• 65+ drivers can only renew their licence for 5 years at a time (renewal is free, except for a small fee for the actual card)
• 75+ drivers no longer need to pass a medical test each year
• Senior drivers are encouraged to self-assess their driving and make sensible choices

South Australia

Seniors in South Australia are not required to pass an annual medical test, unless they have a known medical condition that needs to be regularly assessed⁹.

Instead, drivers 75 and over must complete a self-assessment form every year. If they answer yes to any questions, they must complete the assessment with a doctor. Senior drivers must only take a practical driving test if recommended to do so by a doctor.

Western Australia

In WA, senior drivers over 80 must¹⁰:

• Pass a medical test every year
• Take a practical driving assessment if there is any concern about their ability to drive

Drivers 85 years an over must take the practical driving assessment every year.

Northern Territory

In the NT, drivers are expected to self-assess their driving ability¹¹. However, doctors are legally required to tell the Registrar of Motor Vehicles if they have assessed someone as unfit to drive.

How you could reduce your premium if you’re a senior

As with any age group, there are ways senior drivers may be able to reduce their premiums:

1. Senior discounts

It’s worth checking with your insurer to see if they offer senior discounts. If they don’t, try asking other insurers before settling for your current policy.

2. No-claim discount

If senior discounts aren’t an option, your safe driving history may be an advantage. Check with your insurer to make sure your premium accurately reflects your no-claim status¹². If their rewards are minimal, it’s a good idea to check with a few insurers, as your driving history is usually transferrable.

3. Driving frequency

If you’re driving less, you may be able to find a pay-as-you-drive policy that better meets your needs¹².

4. Age restrictions

If you no longer have under-25s driving your car, you may be able to add an age restriction to your policy. This can help reduce your premium by reducing risk related to young drivers¹².

5. Bundle your policies

If you have more than one type of insurance, it can often be a good idea to have them through one insurer¹². If your current insurer doesn’t offer loyalty rewards, you may find another that does.

6. Excess

Choosing a higher excess can help reduce your premium, but make sure it’s still affordable, as you don’t want to be out of pocket in an accident.

7. Market value

Insuring your car for its market value can help save you money on your premium¹². Your insurer may offer to insure it for an agreed value, but this is usually higher than market value and can increase your premium.

iSelect can help you compare car insurance policies from our range of providers. Simply call us on 13 19 20 or start comparing online today.

Sources:
1. http://www.tac.vic.gov.au/road-safety/safe-driving/older-drivers/
2. https://www.moneysmart.gov.au/insurance/car-insurance/young-drivers/
3. https://www.humanservices.gov.au/individuals/enablers/benefits-pensioner-concession-card/39031
4. https://www.qld.gov.au/seniors/transport/senior-drivers/safe-driving/
5. https://www.rms.nsw.gov.au/roads/licence/older-drivers/index.html
6.https://www.accesscanberra.act.gov.au/app/answers/detail/a_id/1581/kw/older%20drivers#!tabs-6
7. https://www.vicroads.vic.gov.au/licences/health-and-driving/medical-review-process/stage-1-reporting/
8. https://www.transport.tas.gov.au/licensing/information/older_drivers/
9. http://mylicence.sa.gov.au/road-rules/the-drivers-handbook/fitness-to-drive/
10. https://www.transport.wa.gov.au/licensing/renew-my-drivers-licence-seniors-85-plus.asp
11. https://nt.gov.au/driving/driverlicence/get-your-licence/medical-fitness-to-drive/
12. https://www.moneysmart.gov.au/insurance/car-insurance/