Historically, older drivers have enjoyed lower car insurance premiums than other age groups and been less hard hit by market increases. However, since May, insurance premiums have risen at five times the rate of inflation and older drivers are the ones seeing the highest percentage increase.

Is this unfair opportunism by insurers taking advantage of a group with previously lower prices? Or is the increase justified for older drivers – are they simply more of a danger on our roads?

The insurance market

According to the latest figures, premiums have increased by an average of 14.6% in the last 12 months to reach an average figure of £755.  This is a rate that is five times the inflation rate of 2.9%. The rises mean that younger drivers now pay an average premium of £1,719.

Insurers have blamed a number of factors for the shocking rises including the increase in taxes, the weak pound and changes to the discount rate used to calculate claim pay-outs where personal injury is involved. This is in addition to the standard declaration of increased claim costs.

While younger drivers (and often their cash-strapped parents) are used to eye-watering premiums, older drivers are not. However, it seems that the latest rises are looking to reverse that situation, with older drivers experiencing the biggest increase, at an average rise of 16.5%. That puts the average premium for this age group at £434, according to Consumer Intelligence.

The older driver market

Many argue that older drivers have seen the steepest premium rises because they are responsible for more crashes than before, but do the figures back up this assertion?

According to the Department of Transport, in March 2016 there were 4.5 million people aged 70 or over with a license. 236 of these were over the age of 100.

As drivers age, they have a greater risk of health conditions that can affect their driving, such as poor eyesight or reduced reflex response time. However, researchers have shown that old age doesn’t necessarily equal more accidents. Older drivers are more likely to be killed or seriously injured in a road accident, but this isn’t always due to a poorer quality of driving – they are simply more vulnerable to injury than younger people.

Curiously, one area that did highlight an issue was making right-hand turns. 13% of those aged over 70 have had an accident involving a right-hand turn. That compares to just 7% of drivers under the age of 70. Simulator tests show that older drivers take longer to make this manoeuvre than younger ones.

Personal injury claim rates

One of the big problems blamed for the recent insurance price increases was the change to how the rate for personal injury claims was calculated. This went from -0.75% to 2.5% in a much-criticised move back in March, which aimed to ensure the long-term injured received the right payout.

The move was also behind earlier price rises. However, in September, the government announced it would change the rate again, slowing down the rate of price increase. It also says that the rate will be reviewed at least every three years, which Consumer Intelligence believes has helped stabilise prices.

The big picture

GPs have an obligation to let DVLA know if a driver is no longer fit to drive. Family members are also urged to report anyone they think is a risk. However, our ageing population means that the number of older drivers continues to increase. Could it be that this is the real reason for the increase in premiums for older drivers – that this age group is growing and thus the potential for greater profits is higher?

Should older drivers pay more for their car insurance? Or is this just another money-grabbing venture by insurance companies looking for a new group to target? Leave a comment below to share your opinion. 

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