The older the better (until you get wobbly)

Age confers huge benefits on car insurance costs

Age does brings some benefits, particularly when it comes to insurance premiums. But most older home and car owners still pay far too much for their policies because they do not shop around.

Cheaper policies are nothing to with respect for old age. Insurers are keen to attract older customers - and older in this context means anything from 45 upwards - because they are considered a lower risk.

Retired home-owners stay at home more, so are burgled less. Car drivers become more cautious and safer as they get older, until around 70 when their skills wane, and the premiums may rise. Older drivers travel less far, and tend to avoid rush hours and bad weather.

One of the most competitive insurance providers for older people is Age Concern Insurance Services (Acis). The charity's insurance arm developed out of the belief that many policies were too expensive and not sufficiently tailored to the older person.

Since Age Concern launched its insurance business 13 years ago it has attracted 400,000 customers, making it one of the largest insurers for the elderly, and earlier this year dropped its minimum age for customers to 55.

Acis claims it is generally cheaper for older home owners than its competitors, often markedly so. For pounds 20,000 of contents cover in the Manchester area, Acis charges pounds 94 a year, compared with pounds 238 quoted by Commercial Union. Even Direct Line, one of the keenest insurers on price, admits it is unable to match the quotes in most instances listed by Acis.

Direct Line points out that its existing customers are entitled to discounts, and it offers a further reduction for membership of a neighbourhood watch scheme. Acis is only one of several insurers targeting the elderly. Others include Ansvar, RIAS, the Retirement Insurance Advisory Service (which is actually a commercial organisation), SAGA (an extension of the specialist tour operator), and CGT Direct, while all the major insurers offer age- related and home-based discounts.

Large premium reductions are also available for older car owners, with the same specialist providers offering policies. Acis claims to undercut many other insurers by as much as 50 per cent. The Retirement Insurance Advisory Service, the largest specialist provider to older people, also offers policies cheaper than many general insurers, as well as a breakdown policy, launched earlier this year, which was the first exclusively for older drivers. RIAS says its breakdown service is "much, much lower cost" than the AA, RAC or National Breakdown, because mature drivers constitute a lower risk, by ensuring cars are maintained better, and by driving few miles than younger drivers.

Discounts may come at the price of inflexibility, however.

Research by Commercial Union found that about one third of motor claims from mature customers arose from accidents while teenage sons and daughters were driving. For the cheapest premiums a ban on younger drivers is necessary, and temporary cover for the unexpected emergency can be almost impossible to arrange.

Matching premiums to actual risks has meant a much more flexible premium structure, to the benefit of older and other low risk customers.

Norwich Union changed its pricing system this year, whereby points were added or taken away depending on factors that might affect price, such as age or motoring convictions.

"In August we went to a percentage basis, and we can make changes by individual percentages if we wish," a spokesman says. "We have a sliding scale according to age, starting from 25, and as a person gets older the rates get substantially better, with discounts for people who are retired, and other discounts for women, but less so as they get older."

Which means that you do not have to wait until 65 before you can gain from being older. Even insurers with a specific cut-off point for older person's discounts are bringing them down - Commercial Union has just cut it from 55 to 50, and Eagle Star gives a 10 per cent discount for being aged between 45 and 64, before even greater discounts are awarded at older ages.

But there will come a time when the discounts disappear. For Eagle Star that is 75, and for some other insurers 70. After that insurers may require an annual doctor's examination

Age Concern Insurance Services, 0345 125816. Retirement Insurance Advisory Services, 0800 552100. Ansvar, 01323 737541. CGA Direct, 0800 525200

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