Driving Records of Persons 65 Years of Age and Older: Are Insurance Rate Reductions Warranted?

About the report:

There are many elements that constitute the makeup of the automobile insurance premium, the major ones being age, sex, marital, status, and the utilization of the automobile. While the biological aging process places health limitations on drivers aged 65 and older, which in turn affect their driving performance and safety, they nevertheless experience fewer accidents than other age groups of drivers. Additionally, drivers 65 and above comprise the fewest number of motorists of any age category. These motorists, however, do not have the lowest rate for annual vehicle miles of travel, a factor which must be included in an analysis of driving performance. The rates for total accidents per 10,000 driver miles and fatal accidents per 1,000,000 driver miles are greater for the 65 and above age groups than for many of the other age classifications. When the mileage accident rates for all age groups are computed, it is found that the 65 and above age categories have more accidents per mile than many of the other age groups. In summary, it is concluded that lower insurance rates for older drivers are unwarranted when age, per se, is used as the evaluative criterion. Insurance companies should give more consideration to factors such as annual vehicle miles of travel, mileage accident rates, etc. in the rate setting mechanism than to mere chronological age.

Authors