Discount for Senior Motorists Questioned


New Massachusetts auto insurance data confirm that drivers over 65 are safer behind the wheel but probably do not deserve the full 25 percent auto insurance discount they are enjoying through state law. Some legislators are planning to change the privileges for senior motorists, which could trim down discounts received by drivers of that age statewide.

Discount for Senior Motorists QuestionedThe Automobile Insurers Bureau of Massachusetts (AIB) revealed through a recently compiled data that, as a group, drivers over 65 are lower insurance risks than drivers from all the other age brackets. However, a subset of the 65-over group, drivers aged 75 and above, get involved in accidents more often and file more property damage claims than all drivers except youths, who have less experience behind the wheels.
The other significant finding by AIB was that car accidents caused by drivers older than 75 involve lesser injuries.

In general, data suggest that Massachusetts’ senior motorists are not killing machines on the road, despite recent deadly accidents involving older drivers. But newly compiled data also question for the first time a state law which gives drivers over 65 years old an automatic 25 percent discount on their auto insurance premium regardless of their driving records.

Back in 1977, Massachusetts experimented on auto insurance competition by allowing as many as 100 insurers into the state, each with their own policy. But the experiment failed and several changes were made since then, including the initial approval of the 25 percent discount for older policyholders. Legislators say the discount is given as a benefit for seniors, not as a reward for driving.

AIB says it was prompted by media and state regulators to publish a four-page document as a response to the recent spate of fatal accidents among senior drivers. The auto insurance industry’s service bureau says they are hoping that their research has shed some light regarding the extent to which privileges given to seniors become a problem.

The report breaks out data by accident records from 2005 to 2008 involving two groups: experienced motorists (those who have been driving for more than six years) and inexperienced drivers (less than six years). AIB further breaks down experienced motorists’ group into three subgroups: those 65 to 74, those 75 and above, and all others.

Some analysts say, based on driving records, motorists 75 and above deserve discounts but not a full 25 percent. They explain that companies are losing huge income on those discounts, and they try to make up for losses by charging other drivers higher, adding that auto insurance providers in Massachusetts will be able to perform better and competition will be fairer if subsidies come out.