Car insurance for seniors and pensioners

With lower rates of accidents compared to younger drivers,¹ some insurance providers may offer car insurance for seniors with competitive car insurance premiums that reflect their good driving history. That said, the cost of car insurance also depends on a variety of factors, including the driver’s age. It all depends on your provider and their risk assessment, as well as your vehicle and driver details.

Seniors and pensioners may be able to reduce their car insurance costs in a number of ways, including:

• Increasing your excess. You might have the option to choose a higher excess (the one-off payment you make each time you claim). This reduces the cost of your insurance premiums but means your excess will be more expensive if you make a claim.
• Restricting the age of drivers. While this means your children or grandchildren might not be allowed behind the wheel of your car, restricting the age of drivers can help reduce premiums.
• Low kilometre policies. Some car insurance providers offer pay-as-you-drive or low kilometre policies where you set a limit on the number of kilometres you drive in a year. This can be handy if you don’t drive as much as you used to, as these policies are typically cheaper than regular car insurance plans. There are usually terms, conditions and limits to these kinds of cover.
• No claim discounts. Depending on your driving history, you can make use of no claim discounts if you haven’t made a car insurance claim in a set number of years. The more years you drive without making a claim, the better your no claims discount.
• Purchasing cover online. Some insurance companies offer discounts if you purchase your car insurance through their website.
• Compare insurance annually. Car insurance policies almost always increase in price every year, even if you haven’t made a claim. Comparing policies every year can help you look for a better deal elsewhere.

Some of these money-saving methods may not be available through different policies and providers. It’s essential to read over the relevant PDS to get the details of a specific policy before you buy, as well as the Target Market Determination (TMD) to assess whether the chosen product is appropriate for you.

Some providers do offer discounts, but this isn’t necessarily based on whether you receive a government pension or are a self-funded retiree. For example, some insurance providers offer online discounts for buying insurance through their website, regardless of whether you’re on a pension or not.

A pay-as-you-drive car insurance policy (also referred to as a low-kilometre policy) is a type of comprehensive car insurance that’s typically cheaper than regular comprehensive policies. It isn’t just available for pensioners either; other age groups can also take advantage of this feature, provided they won’t exceed the kilometre limit on the policy.

You specify a limit for the number of kilometres you plan on driving over a 12-month period. If you exceed this limit, you might face a higher excess. You can often increase your limit if you’re going to exceed it sooner than expected, though this does cost extra and the change must be approved by the insurance provider.

This type of policy is handy if you don’t drive very far or often. Depending on your retirement lifestyle, this could be a product that suits your needs and budget.

If you’re a QLD resident turning 75, you’ll need to pass a medical assessment to receive a medical certificate to drive and carry it with you at all times while driving.² The maximum validity for this certificate is 13 months, meaning you’ll need to undergo a medical assessment roughly every year.

Medical professionals may reduce how long your medical certificate is valid for if they want to go through more regular check-ups with you.

Residents in NSW who are 75 or older will need to undergo an annual medical review to keep their licences.³ Drivers aged 80 years and over will have to undergo an older driver medical fitness assessment every year.

Drivers over age 85 also have the choice of keeping their unrestricted car licence or moving to a modified licence. A modified licence still requires a medical check every year, but you won’t need to do a driving test. However, the licence only allows you to drive under certain conditions.

Victorian drivers don’t need to have medical assessments when they reach a certain age. ⁴ However, those aged 75 years old or older can only renew their driver’s licenses every three years.⁵

All Tasmanian drivers, including older drivers, need to self-assess their ability to drive should they be concerned about a medical condition.⁶ Those with a medical condition will need to have an assessment to determine their fitness to drive and may have to adhere to certain driving conditions and restrictions.

If you’re a driver in WA, you’ll need to have annual medical assessments once you turn 80 years old.⁷ If you’re over 80, you may be required to undertake annual practical driving assessments to test your driving ability. The Department of Transport will assess your driving record and any medical advice prior to issuing a licence.

SA residents over 75 years old with no previous medical condition will need to perform a self-assessment of their medical fitness to drive.⁸ Based on the answers to your self-assessment, a medical professional may need to complete their own assessment regarding your ability to drive safely.

NT drivers, including seniors, will need to complete a medical fitness to drive assessment if they have a disability or medical condition.⁹

Eye tests are required for ACT drivers at ages 50, 60, 65 and 70.¹⁰ They’ll then need to have an annual medical examination by a doctor once they reach the age of 75 to be able to drive.

Any modifications to your car to assist with mobility will affect the value of your car, which can affect your premiums. There are specialty providers that offer car insurance for disability parking permit users.

Many insurers charge extra to add roadside assistance to your policy or offer it separately. Purchasing roadside assistance separately means you can still choose Third Party Property Damage or Third Party Fire and Theft car insurance, which are more affordable (but cover less) than comprehensive car insurance policies.