Car Insurance for Pensioners – What Plays a Role in Determining the Premiums
February 15, 2017
Car Insurance for Over 60
Three main factors contribute to lower car insurance for over 60.
According to car insurance companies, pensioners:
- Drive off-peak hours when roads are less busy
- Drive fewer distances
- Have years of experience driving on South African roads
Cut back trends
However, a growing trend is that pensioners are cutting back on short-term insurance to survive severe economic pressures.
The majority of retirees live on a fixed monthly income, and low-interest rates have bitten deeply into their liquidity.
To cut back on expenses, many elderly citizens have cancelled their vehicle insurance policies.
This trend opens the door to financial disaster should they be involved in a road accident. That would then face third-party or personal liability claims.
Short-term insurance advice
- Do not opt for “self-insurance”.
According to a spokesman for First National Bank, self-insurance more often than not degenerated as cash reserves intended for accidents or other vehicle contingencies were used for other financial needs.
Another serious consideration about non-insurance was that consumers left themselves financially exposed for third-party or personal liability claims.
How to lower monthly premiums for car insurance for over 60
Two major factors contribute to lower monthly car insurance premiums.
Insurance companies offer pensioners who live in security complexes lower premium rates because their vehicles are less likely to be stolen or vandalised.
The insurance company can reduce monthly premiums on an annual basis because the age of the vehicle will have reduced market-related replacement values.
Consult a broker
According to the FNB spokesman, the experience of the industry has proven that older people lead more financially prudent lives. That results in a lower risk rate for the insurance industry.
Pensioners should regularly consult a broker they can trust to ascertain what or if they qualify for a reduction in their insurance premiums.
We cannot over-emphasise the importance of comparison. This way, we urge pensioners to seek out the most affordable premiums. They should also strip down any unnecessary additional benefits that do not meet their lifestyles.
Although people could tempt pensioners to cancel short-term insurance as a monthly savings option, it is clear that this decision could leave them in dire financial straits.
They are in fact more vulnerable than their younger counterparts.
As the FNB spokesman explained, younger people are income-earners and can replace or repair damages to their vehicles.
Pensioners, on the other hand, are reliant on fixed monthly incomes. Therefore, they do not often have the financial resources to replace a stolen vehicle or to pay the cost of repairs.
The solution is to update their short-term insurance portfolios regularly. They should also request reductions in premiums as their cars age and their no-claim bonus benefits increase.
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All info was correct at time of publishing