Sullivan Insurance - Insight & Tips

Insurance fraud is the second largest economic crime in the United States, second only to tax evasion. This $85.3 billion dollar problem represents a cost of $1,030 each year to every American family in the form of higher insurance premiums, taxes and costs of other goods and services.

For older Americans, driving and maintaining a car can be expensive. As seniors age, their auto insurance rates can climb. But many senior drivers are not taking advantage of ways to save money on their insurance bill, according to a new poll by the Independent Insurance Agents of America (IIAA).

One in every three auto insurance consumers over age 65 has not reviewed his or her auto insurance policy within the past year. This is the highest percentage among all age groups. Also, compared to consumers of other ages, there are fewer seniors taking advantage of money-saving discounts offered by insurance agents and companies � such as those offered for good drivers, air bags and passive restraints.

�While senior citizens with good driving records have some of the best opportunities to save money on their auto insurance, they appear to be the most lackadaisical about taking advantage of them,� says Madelyn Flannagan, IIAA�s Consumer Affairs Advocate. "That�s unfortunate because seniors have to be particularly careful when it comes to choosing and maintaining an auto insurance policy. Insurers know that, unlike young drivers, seniors� driving records are unlikely to improve over time.�

While insurers recognize that, compared with younger groups, fewer seniors are licensed to drive and drive fewer miles overall � so seemingly pose less risk on the nation's roads � they also acknowledge that, as seniors approach their later years, they are also increasingly liable to be involved in serious or fatal accidents.

Motorists, who are 75 and older, have a higher rate of fatal motor vehicle crashes than drivers in all other age groups except teenagers, according to the National Safety Council. And the IIAA poll found that seniors over age 65 were more likely than any other age group to have filed an accident claim for a multi-car crash in the past three years, meaning increased risk for others on the road as well.

A steady increase in the number of motor vehicle fatalities among seniors over the last decade may signal that more senior drivers than ever are taking to the roads. The number of motor vehicle deaths among those 75 and over shot up an alarming 31 percent between 1986 and 1996 � while the number of fatalities among drivers age 44 and younger decreased overall during the same time period, says the Council. Seniors age 75 and over were the only age group to experience an overall increase in the motor vehicle death rate over that same ten year period during which the nation experienced an overall decrease.

� Be honest and realistic about your risk. Seniors need to decide whether pattern of accidents reveals a loss of driving aptitude. Insurers look carefully at accident frequency patterns in determining risk.

� Be loyal. Consider staying with one agent or company. Those who are 65 and over should be careful about moving their insurance from company to company or agent to agent, as they are statistically harder to insure as they grow older. A long-term relationship with one company or agent will provide you more leverage in the claims process, especially if a pattern of accidents or claims appears. However, do not rule out the advantages of shopping around, even if you do not have a perfect record. Ask friends for advice and use an independent agent who can shop around for you.
Choose carefully when shopping for a car. Some of the models particularly popular with seniors also are, unfortunately, popular among thieves, too. While one model may be less expensive than another, it may cost more to insure it if its theft rate is higher. Do your research.

� Senior Discounts. Ask about special senior discounts for retirees and mature driver education courses.

� Multi-policy Discounts. Take advantage of multi-policy discounts. Many insurers offer discounts to consumers who have maintained several types of policies with one company (i.e., homeowners coverage, life insurance, auto coverage).

� Infrequent Driving.. Low mileage and higher deductibles can reduce premiums. Ask your agent or company if they offer discounts for those who drive infrequently.

� Deductibles. Raise your deductible to save on your premium.

� Memberships. The benefits of membership. Membership in certain groups may offer special insurance deals for seniors or group rates with certain insurers.

� Stay Healthy. Maintain good health. Many insurers ask for medical records that attest to seniors� vision, hearing, and general wellness. Simply complying with that request allows many older policyholders to keep the same rates year after year.

Young drivers continue to account for the largest percentage of auto accidents and auto insurance claims each year, wreaking havoc on their wallets � and for the youngest, often their parents� wallets. But according to a new Independent Insurance Agents of America (IIAA) poll, because they have been saddled with high auto insurance rates for years, many younger drivers have evolved into sophisticated insurance consumers who are aware of ways they can save money on their auto insurance.

The IIAA poll found that younger drivers are more likely than any other age group to have reviewed their auto insurance coverage in the last year. A good many (81%) of these younger drivers say they take advantage of discounts offered by insurance agents and companies � such as those offered to drivers who are accident free or good students � to save money on their insurance.

Because of their lack of experience, young drivers are more likely to make mistakes on the road that range from driving too fast, driving inattentively, and misjudging distances and reaction times. According to the IIAA survey, nearly 40 percent of drivers age 18-34 have filed an auto insurance claim in the last three years, 30 percent for single vehicle crashes, the most among any age group.

Drivers age 19 and under were involved in 14% of all accidents and 12% of fatal collisions in 1996, even though they represented only 5% of all drivers on the nation's roads, according to the National Safety Council. The numbers for drivers age 20-24 were only slightly better.

The effect of these statistics on their auto insurance rates is not lost on young drivers. Madelyn Flannagan, IIAA�s Consumer Affairs Advocate says, �It appears that younger drivers are learning from their mistakes on the road.�

New efforts like graduated drivers licensing programs are taking these daunting figures to task, but aren't yet easing the financial burden on young auto insurance consumers. Younger drivers can expect to face high auto insurance premiums through their mid- to late twenties or until they marry.

� Keep a clean driving record. A history of speeding tickets or at-fault accidents is the biggest culprit when it comes to sky-high insurance premiums for young drivers.

� Ask about formal agreements not to drink and drive. The availability of a discount for signing such an agreement varies among insurers and states.

� Insure young drivers on parents� policy to take advantage of multi-car discounts. It is generally not economical for a teenager to purchase a separate policy.

� If possible, assign a young driver to the family�s least valuable car. Generally insurers will allow consumers to do this only if the number of automobiles equals or exceeds the number of insured drivers on a policy. Otherwise, the young driver will generally be insured as a part-time driver of the family�s most expensive car.

� Take advantage of young driver discounts. Many insurers offer premium discounts for good students (who maintain a grade average of B or better), those who take approved drivers education courses, and those who limit their driving hours.

� Check out group offers. Check with your credit union, employer, alumni club or other organization to which you belong to see whether they offer group discounts through a particular insurer.

� Drop unnecessary coverage. Save money by dropping rental reimbursement, glass, towing and replacement cost coverage, if you feel you do not need them. Towing coverage may already be covered as a benefit of membership in an automobile club or other organization.

� Raise deductibles and pay for minor damage out of your own pocket if you suspect you may have to file multiple claims over the next few years. Be sure to consult your agent for advice first.

� If buying a car, take insurance costs into account. Consider purchasing a model that is less expensive to insure. Remember: If you can't afford the insurance, you can't afford the car.

� Ask about �away at school� premium discounts. Some companies reduce premiums when students leave home for school and leave the car at home, assuming that the young driver will use the car only when home on break.

� Stay with standard companies. Non-standard insurers often are viewed by standard insurers as insurers of last resort and therefore reflect on your desirability as a customer.

� Ask an agent. Agents can guide you through the process of finding the right insurance. Independent agents in particular, since they do not work for any one company, can provide leverage with your company during the claims process. Your agent can also help you evaluate and manage your risks. And, if you are dropped by your company, independent agents can place you with another insurer.