Hopes that insurers' deal marks a turning point for older drivers

Will aging motorists and travellers get better options?

Older motorists and travellers have long been the pariahs of the insurance industry, often being charged over the odds or even refused cover altogether, but they could find life a little easier following an announcement this week.

Under an agreement which came into force on Friday, members of the Association of British Insurers (ABI) and the British Insurance Brokers' Association (Biba) will automatically refer customers to an alternative provider or Biba's "Find a Broker" service if they are unable to offer cover because of age restrictions on their range of products.

This follows a move by insurer LV, which has stated it will scrap the maximum age limit for new car insurance customers (they used to refuse to cover drivers over the age of 86) having already got rid of its travel insurance upper age limit.

These developments could signal the beginning of better deals for older insurance customers, but many experts say there is still a lot to be done. "Driving is such an essential element of older people's wellbeing and without access to a car the risk of isolation would be much greater," says Debora Price from the institute of gerontology (the study of older people) at King's College London.

Financial analyst Defaqto found that of the 448 annual travel insurance policies on the market, 57 (12.7 per cent) have an upper age limit of 64, and 78 will not insure those aged over 74. And, of the 232 car insurance policies, it found that 30 (12.9 per cent) have an upper age limit of 75, and 54 stop at 80. There are still providers offering policies to older customers; Defaqto found that of those that state a maximum age the average is 81.4 years, and 17 policies have no upper age limit at all, but these figures do show that options can be slim.

"As age increases the number of available policies decreases, for example someone aged 86 can choose from only 25 per cent of the available policies," says Mike Powell, an insight analyst for general insurance at Defaqto.

ABI and Biba's move could be a sign that insurers are prepared to relax their restrictions, but it remains to be seen if more people will be offered policies (they still have to go through the underwriting process) and, crucially, if it will have any affect on prices.

We asked comparison site Moneysupermarket to look at premiums for various age groups for a retired male driving a Ford Fiesta for 10,000 miles a year with five years' no claims discount. They found that the average annual cost for a 70-year-old was £212 but at 80 the average premium rose to £341 and then, at 90, costs escalated to an eye-watering £1,022.

Travellers will also get a nasty shock as they get older; average premiums for a 70-year-old male looking to spend a week in Spain came out as £23.04, but rose steeply to £55.13 for an 80-year-old and £90.67 for a 90-year-old.

There may well be elevated risk associated with motorists and travellers over a certain age and under the new arrangement the ABI will publish claims data broken down by age to highlight the cost of insuring older customers. But even with this data, Dr Price questions if it is fair to apply blanket premiums based purely on age. "There has been a lot of research in the past few years and the statistical evidence for the extent to which older people are a higher risk is very mixed – the higher premiums are not really evidence-based," she says.

It's not all doom and gloom, fortunately, as there is a great deal of variation between providers. Specialists such as Saga, Staysure and Age UK are a good starting point as they offer products which are tailored to older customers and have no upper age limit. But, it doesn't always follow that specialised policies are the cheapest, so don't dismiss regular insurers without comparing costs; mainstream insurers such as LV, Tesco, Barclays, Nationwide and Swiftcover offer insurance to 90-year-olds. Going online and using comparison websites is usually the best way to find competitive deals.

There may be other ways to cut costs. For car insurance, for example, check that your premium reflects your usage and mileage. So, if you do not take your car to work ensure you only pay for social and domestic use, which is cheaper than cover that includes commuting. Similarly, if you only drive 4,000 miles a year your insurer could offer a discount.

On the travel insurance side, look for companies that include some medical conditions free of charge and if you go abroad at least twice a year get an annual, multi-trip policy, which should be cheaper than single-trip policies.

You should also play around with excess levels – the amount you pay in the event of a claim – to reduce your premium. You do need to be careful though; as The Independent on Sunday reported last week increasing the excess can sometimes be a false economy. Generally, a voluntary excess of around £100 will reduce your premiums significantly, but check whether increasing it any further will make a big enough difference to cover having to fork out a huge sum when you claim.

Suggested Topics
FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Have you tried new the Independent Digital Edition apps?
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam