Sun-Sentinel (Fort Lauderdale, FL) September 25, 2003 Thursday Broward Metro Edition
Copyright 2003 Sun-Sentinel Company
Sun-Sentinel (Fort Lauderdale, FL)
September 25, 2003 Thursday Broward Metro Edition
SECTION:
LOCAL; Pg. 1A
LENGTH: 808 words
AUTO INSURANCE RISING FOR SENIORS
BYLINE: Diane C. Lade Staff writer
BODY:
Florida's oldest and youngest drivers now have something in common: Both groups can complain about high insurance rates.
For years, older residents enjoyed premiums at or below base rates, as they had a reputation for being among the safest drivers on the road.
That started changing a few years ago, as insurance carriers started realizing that accident rates and claims began increasing once drivers passed their 70th birthday. In fact, the age 85-plus group has almost identical rates of property-damage claims as drivers in the 16- to 19-year-old group, according to an Insurance Institute for Highway Safety report issued earlier this year.
"The statistics show that much-older drivers have accident rates that rival teenagers. So we have to charge a premium for the risk we are assuming," said Robert Hartwig, chief economist for the Insurance Information Institute, a nonprofit research group for the insurance industry.
The result is that while many Floridians of all ages have seen automobile insurance increases since 2000, drivers in their 70s and 80s probably got hit with an extra 10 percent or 15 percent, those in the industry say.
And that trend may continue, they add, as the number of elderly people still behind the wheel continues to grow. According to state analysts, there were 203,869 Florida drivers age 85 and older in 1999, a 48 percent increase from only four years earlier.
A GROWING POPULATION
"As we anticipate more older drivers on the road, they may end up paying a higher premium," said Tom Hagerty, Florida spokesman for State Farm Insurance, the state's largest automobile insurance carrier with 2.6 million policies. Already, a driver age 85 would pay 5 percent more for a State Farm policy than one 65 years old, even if their driving histories and vehicles were identical.
Older drivers also may find their companies are quick to drop them for any infraction and finding new coverage is tough.
Six years ago, Margery Delano of Boynton Beach bought a new policy because the rates were better. Then this year, she received her first speeding ticket, going 60 mph in a 40 mph zone.
Delano assumed her premium would go up. But she was stunned when the company canceled her -- even though she has been teaching AARP's 55 Alive defensive driving course for 13 years. Now Delano is paying about $300 more a year under her new carrier, or $952 annually, and for much less coverage.
But she doesn't blame the insurance companies for being more cautious about older drivers. "We're a dicey group," Delano said.
Age-related health conditions also put seniors more at risk for being seriously injured or killed in a crash, Hagerty said, leaving the insurer liable for larger medical bills.
Research by the Insurance Institute for Highway Safety shows that in 2001, the rate of fatal crashes per licensed driver began to go up sharply at age 75. In terms of fatal crashes per miles driven, the institute found drivers age 85 and older had a higher rate than those age 16. The teenagers had 13.4 fatal accidents per million miles driven, while the seniors had 15.6 accidents per million miles.
State Farm broke up its longstanding 65-and-older age category in 2001. Now it has separate groups for those age 75 to 84 and for drivers age 85 and older.
Allstate, the second-largest carrier, did something similar, with separate groups for those age 76 to 80 and for 81 and older.
Originally, all drivers older than 65 received a 10 percent to 15 percent break below the base rate because of their low accident rates, Hagerty said. But now those in the new 75-and-older age groups get no break.
TREND SPREADING NATIONWIDE
Carriers in some states are considering assessing older motorists more than the base rate. Already in Iowa, motorists age 75 and up are charged 10 percent more by State Farm -- not because Iowans are worse drivers than the rest of the country, Hagerty said, but because the company had access to better statistics that allowed it to adjust rates more quickly.
Does that mean seniors in other states should brace for the same?
"I don't think it takes a genius to figure out it's a possibility," Hagerty said.
Insurers also are becoming reluctant to give discounts for drivers completing defensive driving courses such as AARP's 55 Alive because the sessions are entirely in a classroom and there has been little documented evidence they reduce crash risk. Hagerty says State Farm only gives the break in states that mandate it, such as Florida.
But Hartwig said the industry probably will get behind more rigorous classes or road testing for older drivers, and that rates could be lower for seniors in these programs.
"The solution is to ascertain which people shouldn't be driving," he said.
Many had thought that older drivers already paid higher rates...in some states that was true, but it is slowly starting to rise in others.
