Low-Cost Car Insurance: Seniors vs. Teens

Posted by Lauren Moss on July 19, 2010 Leave a comment (0) Go to comments

Teens are careless, easily distracted and prone to risk-taking, while seniors are cautious and far less likely to be involved in an accident so the latter group is more deserving of low-cost car insurance right?

The answer is not as simple as “yes” or “no.” Those who underwrite life and/or home owner’s insurance base the cost of such premiums on factors that are reasonably predictable. For example, it’s a fairly simple process to determine how long someone is likely to live based on their genetic history, lifestyle and general health; likewise, if an insurer knows that a home is located in a region with a history of earthquakes, wildfires and/or flooding and a geological survey confirms the likelihood of such events happening in the future, an insurer can take these factors into consideration when setting rates.

However, home and auto insurance are two very different things; when it comes to the latter, there are many, many different variables not the least of which is the fact that an automobile is just that mobile. A house is not likely to be moved from one location to another, but an automobile moves from place to place almost every day and is subject to a wide range of unpredictable conditions. Not the least of these are (A) the driver and his/her mental state at any given moment, and (B) other drivers which are the least predictable of all.

In Fact…

While a testosterone-fueled teenage boy or hormone-addled teenage girl, playing what passes for “music” these days at the decibel level of a jet aircraft on takeoff, sending text messages, drinking soda, taking a cell phone call and jabbering to his/her friends all while attempting to operate a vehicle can and does pose a distinct safety hazard, so too does the mild-mannered elderly driver, peeping over the dashboard of a luxury sedan the size of a small cruise ship.

In fact, according to a recent study done at Kansas State University, drivers over 65 may be more dangerous to others than their juvenile counterparts. The study found that although older drivers had fewer accidents because they drove less frequently their accidents tended to be more deadly, involving at least one other vehicle. Teen accidents on the other hand tend to be single-car crashes in which they lose control of the vehicle and run off the road, colliding with a stationary object.

On a per-mile basis, elderly drivers were as likely to be involved in an injury accident as teens.

Implications for Auto Car Insurance Rates

So, this begs the question: are teens, with the quick reflexes and better sensory perceptions of youth, necessarily the bad drivers they are made out to be, and do seniors with slower reflexes and eyesight and hearing that isn’t what it used to be really deserve cheap auto insurance rates?

There is indeed something to be said for experience and of course, the fact that seniors do not drive as many miles as younger drivers. However, as birth rates drop, what has already been happening in Canada for many years will start to happen in the U.S., and by 2020, the majority of Americans will be aged 60 and over for the first time in history. It remains to be seen if seniors will continue to get the cheapest car insurance rates simply based on their driving records and the type of vehicle they drive.