Surging insurance costs: seniors face soaring premiums

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Insurance companies are targeting drivers over the age of 70, with many facing price hikes in excess of 50 per cent when they renew their policies.

This is even though many of these customers have had excellent driving records for decades and haven’t filed a claim in a long time.

An investigation by Money Mail found that the over-70s are facing the highest premium increases of any age group. The trigger point for insurers to suddenly ramp up premiums is turning 80.

Insurance consultant Consumer Insurance compiled data that showed renewal prices for the over-70s are rising above those for the whole market.

They increased by £63.04 in the three months leading up to the end of August, as opposed to the market average of £46.40.

According to Dennis Reed, the director of the senior advocacy group Silver Voices, rising premiums are exacerbating the financial strain on many retirees’ family budgets.

According to him, insurers are aware that they can significantly raise senior citizen premiums without breaking age discrimination laws.

The reason for this is that insurers maintain that older drivers are higher risk, and that this risk should be reflected in the premiums they pay.

Data from comparison website Compare the Market published last week showed that rates for young drivers’ car insurance have gone up by 50% in the last year.

According to the most recent Association of British Insurers (ABI) data, although the elderly made fewer claims, the under-25s and over-75s made the greatest average claims in 2021.

“There are strong counter arguments that as people age, they become more careful and risk averse drivers,” says Reed. “Such customers should see premiums lowered, not raised, particularly when they have a long no-claims history.”

According to industry statistics, older drivers file claims less frequently than younger drivers do. Even though there may be fewer claims, the ABI notes that the size of those claims is larger than for the majority of other age groups.

One independent expert told Money Mail: “The ABI says claims costs are rising, especially for the over-70s.

“In turn, the over-70s are reporting that the cost of their cover is rising. As an observer, that feels about right. But does that make it fair. No, it doesn’t.”

Some of the increases faced by elderly car owners when their cover renews are off the scale. 

Increases of 50% or more are frequent, according to data gathered by Money Mail; however, some (but not all) customers have been able to obtain cheaper coverage by shopping around.

For example, 78-year-old Jackie Galloway, from near Newmarket in Suffolk, recently received the renewal premium for her MG3 from Saga.

Her premium had been set at slightly less than £226 for the preceding three years. Her renewal premium increased by 100 and 155%, to either £452 for a year or £575, fixed for three years.

“I drive no more than 4,000 miles a year,” says an exasperated Jackie. “I will be 79 next January and I would have thought that Saga, a company dedicated to serving the best interests of the elderly, would understand that at my age I am not sure I will be driving in three years’ time, or even still be alive.”

Shopping around, she managed to obtain like-for-like insurance for £270, a more tolerable 20 per cent increase.

“Using a comparison website to find better value for money is the only way to keep a lid on the rising cost of premiums,” she says.

Maria Postings, a retired teacher from Woodford Green in Essex, has been less fortunate.

Her four-year-old Toyota RAV4 Hybrid’s insurance is soon up for renewal, and the cost is 98% more than it was the previous year. Despite looking everywhere, she has not found an identical policy that is sufficiently less expensive to justify switching.

“My premium is jumping from just under £648 to £1,284,” says 73-year-old Maria. “In 50 years of driving, I’ve had two people drive into the back of me and that’s it.

“The car is fitted with an immobiliser and I use a steering wheel lock. I do everything by the book — and I’m still being stung with a premium increase which seems unfair.”

Malcolm Brockman is a part of the Alliance of British Drivers, which campaigns on issues that affect drivers, such as the recent expansion of the Ultra Low Emission Zone (ULEZ) in London and the 20 mph speed restriction.

Malcolm, who is 76 years old, was informed that the cost to renew his BMW 328i’s insurance would be 57% higher than it was the previous year. He renewed unwillingly since he was unable to find a cheaper policy elsewhere and is upset that he had to pay such a significant increase.

“No account is taken of one’s experience, driver training or motoring history by insurers,” says Malcolm, who lives in Maidstone, Kent. “I am a former police driver with a maximum no-claims bonus and drive no more than 8,000 miles a year.

“It seems that insurers, like everyone else concerned with motoring and motorists, are taking us for a ride.”

He adds: “Who is monitoring this scandal and when are we likely to see fairness return?”

It is a view shared by many other elderly readers.

Berni Targar, a 76-year-old retired steelworker from the Isle of Sheppey in Kent, speaks for many.

“My insurer, Policy Expert, wanted to push up my premium by 94 per cent,” he says. “I was shocked, but I feel the elderly are being exploited in many markets such as broadband and energy supply.”

He adds: “Shopping around does not always pay. Indeed, the only way I could get my insurer to reduce its renewal offer was by sacrificing my protected no-claims bonus.”

A policyholder can file a claim thanks to this protection without jeopardising their no-claims benefit.

The ABI told Money Mail: “Insurers are conscious that many households continue to face a higher cost of living. They remain determined to ensure motor insurance stays as competitively priced as possible.

“However, the rising costs of repairs as well as energy inflation and increases in costs of labour and replacement parts have made this increasingly challenging.

“Insurance is based on risk, and our data shows that the average cost of claims is higher for both younger and older drivers, which can impact premiums for those age groups.

“Anyone concerned about being able to afford their premium should speak to their insurer — and it can still pay to shop around to find the policy that best meets your needs.”

Sadly, not always.

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