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Whether you’re already retired or even just thinking towards the future, you should factor in affordable insurance for your vehicle if you’re still driving. From third-party policies to higher levels of insurance, there’s a product for every Australian senior driver, so here’s what you need to know about getting car insurance for seniors and pensioners:
Compare the Market’s car insurance expert, Adrian Taylor, has these tips for senior drivers looking to make the most of their car insurance.
Mature drivers can be considered safe and therefore a low risk for insurers. You could shave some of the costs if you take advantage of some of the restrictions and exclusions you can place on your insurance cover.
You don’t have to wait for your renewal notice to compare and switch car insurance. You can switch anytime. But be sure to check for any cancellation fees that might apply first. If you pay your car insurance premium in advance, your insurer may refund you for the remaining period of insurance.
Many insurers offer discounts if you purchase online, but these may only apply to the first 12 months. This is why it pays to compare car insurance quotes every year to make sure you’re always on the best deal for you.
If you want to raise the standard excess payment of your policy to reduce the premium, make sure you factor in if you’ll be able to afford to pay a higher excess amount when you claim.
Everyone’s situation is different, so there’s no definitive answer on what the best car insurance policy is for seniors and pensioners. However, the driving habits of seniors and pensioners may mean that a low kilometre policy could be suitable if you drive less than a certain distance (e.g. under 15,000km) per year.
The type of car you drive can also influence the car insurance features you look for. For example, new cars will generally depreciate in value significantly in the first year of ownership, so you may find that agreed-value car insurance can provide better protection for newer cars than market value car insurance.
When deciding on the best car insurance policy for you, for complete peace of mind, always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to check what coverage a policy offers and whether it’s suitable for your needs.
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:
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.
Each state has rules regarding senior drivers, and these regulations differ again depending on the type of licence (e.g. motorcycle licences). Once you reach a certain age, you’ll need to meet these conditions to drive on the road and potentially even to be covered under your policy.
N.B.: The information below refers specifically to cars and not other classes of vehicles, such as motorcycles or public vehicles like buses or taxis. The following is correct as of November 2023 but is subject to change.
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.
As Executive General Manager of General Insurance at Compare the Market, Adrian Taylor is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. Adrian’s goal is to make more information available from more insurers, to make it easier to compare and save.
1 Road deaths: 12 month total Australia (Table 4.2) – October 2023. Bureau of Infrastructure and Transport Research Economics, Department of Infrastructure, Transport, Cities and Regional Development, Australian Government. 2023. Accessed November 2023.
2 Safe Driving. Department of Transport, Queensland Government. 2023. Accessed November 2023.
3 Your licence from age 70. Transport for NSW, New South Wales Government. 2022. Accessed December 2023.
4 How ageing can affect driving. VicRoads, Department of Transport, Victoria State Government. 2022. Accessed December 2023.
5 Renew Your Licence. VicRoads, Department of Transport, Victoria State Government. 2022. Accessed December 2023.
6 Driving as you age. Transport Services, Tasmanian Government. 2020. Accessed November 2023.
7 Renew my driver’s licence (seniors 80-84). Department of Transport, Government of Western Australia. 2022. Accessed November 2023.
8 Fitness to drive. Department for Infrastructure and Transport, Government of South Australia. 2023. Accessed November 2023.
9 Medical fitness to drive. Northern Territory Government. 2023. Accessed November 2023.
10 Medical conditions. Access Canberra, ACT Government. 2023. Accessed November 2023.