Car insurance and the older driver

A driver’s age is one of the factors insurance companies take into account when calculating car insurance premiums (along with driving history, gender, location, and vehicle make and model) – but why is this and what can you do to reduce your premium as you get older?

One of the key reasons being older can influence a higher car insurance premium is because older drivers are more likely to be injured or killed if they are involved in an accident. According to the latest government Road Trauma Australia—Annual Summaries report, 120 drivers over the age of 65 died on Australian roads in 2022 and deaths overall had increased by 2.3%. The Australian Institute of Health and Welfare states that people aged 65 and over had the highest rate of injury caused by a transport related accident of any age group.  

As you get older, your health may be affected in some way and this may impact your ability to drive. Financial comparison website Canstar told Insurance Business Magazine that drivers over the age of 60 are “statistically more prone to suffering from health problems that could affect driving ability, such as impaired hearing and vision, slower reaction times, and sudden heart or brain issues. This means insurance companies may spend more on claims for older drivers, and thus charge higher premiums as a result.”  

By the age of 65 you may already have a health condition (such as heart disease, diabetes or visual impairment) that could affect your driving ability.  

1. Dementia: If you have been diagnosed with dementia, which is a degenerative condition, you may be ineligible for a driver’s licence, and consequently ineligible for car insurance. Drivers need to be alert, aware, and able to make quick decisions. If you have a dementia diagnosis, then you need to notify your insurer immediately otherwise you may not be covered if you cause an accident. If you think you might have dementia, any other degenerative neurological condition, or are unsure, consult your GP and undertake a cognitive screening test. 
2. Medical assessments: Medical assessments may be required for older drivers who wish to renew their licence – however, the conditions vary from state to state. This ranges from providing yearly self-assessment medical forms from the age of 75 to providing a GP endorsed medical form at 80. In some cases, like in Victoria and the Northern Territory, there are no medical forms required but there is a legal obligation to notify the licencing authority if you develop a physical or mental condition that may impact your ability to drive. 
3. Driving assessments: In New South Wales, you can retain your unrestricted licence by continuing with a yearly medical assessment and passing an on-road driving assessment every two years. There is no requirement for an age-related driving assessment in any other state or territory but if you are unsure if your age or health is affecting your driving, you can opt to have a driving assessment. Remember, in all cases you are legally obliged to provide any medical details that may impact your driving ability to your state or territory licencing authority and to your insurer.
4. Medication and driving: No matter your age, driving under the influence of certain medications may be unsafe. Your GP should explain to you any side effects of your prescribed medication such as drowsiness, blurred vision, judgement, and reaction time. This may determine whether you are safe to drive or not. Keep in mind that certain medications affect people differently. You are obliged to refrain from driving until you know what effect the medication has on you. If your medication is impacting your driving, your insurance claim may be denied. If in doubt, speak to your GP about your medication. 

• Increase your excess: One way you may be able to reduce your premium is by increasing your excess.

• No claims discounts: Some providers may offer discounts if you have not made a claim over a certain period of time.
  

• Reduce risk: A car that is secured in a locked garage may attract a lower premium than one that is always parked on the street and at higher risk of being stolen or damaged.
  

• Luxury and electric vehicles: The more expensive the vehicle, generally the more expensive it is to insure. Luxury and electric cars usually need specialised parts and repairers, which increases repair costs. On the other hand, sedans and hatchbacks generally have lower insurance premiums as parts and repairers are easier to find and lower cost.
  

• Shop around: Consider comparing, quoting, and buying your car insurance online. You will have a better chance of finding the best deal suited to you and your requirements for the best price. Some insurers may also offer discounts for quoting and buying insurance online.
  

• Compare insurance annually: Regularly research and compare car insurance providers to ensure you are getting the best policy for you and your circumstances.
  

• Renewal invitation guarantee: Not all providers will offer a renewal invitation to older drivers, so you may wish to consider one that does. For example, National Seniors Insurance provides National Seniors Australia members with a Renewal Invitation Guarantee regardless of their age or past claims experience. For full details of the terms and conditions please refer to the relevant PDS.  

While age-related risk factors can make it more challenging to find a car insurance policy that suits your needs and budget as you get older, doing your research and staying on top of your health can help you keep costs down and find the right car insurance policy for you.  

Related reading: Bureau of Infrastructure and Transport Research Economics, Australian Institute of Health and Welfare, and Insurance Business Magazine