/ Money, Motoring

Car insurance: does your age really increase your risk?

Premiums speedometer

In our poll, 60% of you voted that you think older drivers are penalised on the cost of their car insurance. You may be right – our research suggests certain age groups are paying substantially over the odds…

Benjamin Franklin famously wrote: ‘In this world nothing can be said to be certain – except death and taxes.’ These days, you could probably add insurance to that list. Home, car, life, health, travel, pet, income, business – you name it and the chances are you can, and are often obliged to, insure it. (And then pay insurance premium tax on top, in many cases.)

If you don’t keep an eye on the costs of these various policies, they eat up much more of your income than they really should. And it really is a case of buyer beware, as our investigation into the cost of car insurance shows.

When we pored over the insurance industry’s own claims and premium data, it revealed that many older drivers seem to be paying more than the claims records suggest they should – which is in nobody’s interest but the insurers’.

Dave’s car insurance premium hike

daveTake Which? member Dave Clegg who, when renewing his car insurance with Tesco Bank, faced an enormous hike of 173% to his premium after he turned 78. That’s £1,038 versus the previous year’s £380).

Dave said Tesco Bank wouldn’t tell him the reason for the increase, but he is adamant that nothing had changed except his age. Tesco Bank denied that Dave’s age was the reason behind the substantial premium increase, but refused to give a specific reason for why it had increased.

Age and car insurance

We examined data for drivers aged 18 to 85 (see the full details in the October issue of Which? magazine). On average, for drivers aged 51 to 85, there’s a bigger difference between the premium they pay and their average claims cost per policy than for those aged between 18 and 50.

For example, a 66 to 70-year-old paid an average premium of £279, 76.6% more than the average cost of a claim per policy (£158). For someone aged 21 to 25, the average premium (£964) was only 42.4% more than their claims cost per policy (£677).

Insurers are entitled to charge higher premiums for certain age groups, where this reflects a greater risk. But they need to demonstrate that this is reasonable and justifiable.

We challenged the Association of British Insurers with our findings. It said age isn’t the only factor determining a person’s premium, adding that insurers also take into account their claims history, address, driving experience and vehicle type. It also said there is a time delay between a claim being made and the change in premium reflecting that claim. We believe this goes only some way towards explaining these differences.

Switch insurance provider

The only way to make sure you don’t get ripped off is to benchmark insurance costs every year and switch as necessary. In the past two months, I’ve switched my home cover (£100 saving) and renegotiated my car insurance with the same provider (£150 saving, after it agreed to stop overcharging me and match the ‘new customer’ quote I had sourced on its own website). Neither took me more than half an hour.

You’ll be glad of insurance when you need to call on it, of course. But in the meantime, don’t leave your money on the table for insurers to snaffle up with next year’s uncontested renewal quote.


From your own statistics it would seem that the cost of dealing with the claim is actually better covered by the younger persons premium.

“For example, a 66 to 70-year-old paid an average premium of £279, 76.6% more than the average cost of a claim per policy (£158). For someone aged 21 to 25, the average premium (£964) was only 42.4% more than their claims cost per policy (£677).”

Old person “profit” £121
Young Person “profit” £ 287

My observation may be wrong IF the administrative cost are actually factored into the average claim per policy but I very much doubt that it is; and what is recorded is what is paid out by the insurers to third parties.

Martin says:
8 October 2014

John Lewis is not one of the best for age. I took out cover for my car with John Lewis. My wife and myself for a premium of £215. I subsequently (yesterday) decided to add my son to the policy: he’s 33, has his own car and 10 years of clean driving. John Lewis quoted a new price of £583 – that’s £365 to add my son. I then got a quote from LV for the three of us, same level of cover for £213.71. John Lewis’ explanation was that my son was a young and inexperienced driver – 33 with 10 yrs experience and full no-claims on his own car? How is that young and inexperienced? Needless to say, I promptly cancelled my John Lewis policy, taking the £40 cancellation fee hit and moved to LV, and when they mature I’ll move all my other policies away from JL. I think they are little more than the usual rip-off broker exploiting their name and brand.

Do you think similar to people who thought SAGA were nice trustworthy folk.

I was quite surprised to find that this year LV will insure some sports cars which has saved me around £330 compared to Aviva’s £550. Adding European recovery etc I am still much better off.

It helps that we alrady have our house insurance with them. And they were also cheapest for very long holiday cover. Cracking firm who have had a great reputation going back over decades to when I worked in an insurance brokers office.

David says:
10 October 2014

I agree older drivers are being discriminated against, older drivers no longer work in most cases and therefor drive fewer miles per year than their younger compatriots and as a result drive more sedately not rushing to work or home in busy rush hour traffic which we can avoid.

Older drivers also, unfairly, attract a fair amount of negative press and media space as to their driving ability. It just dosen`t wash with me. I have been a member of the Institute of Advanced Motorists since the early 60`s and still have a clean licence!

As for re-testing of older drivers I would say no, but I would say yes to compulsory eye tests every 2 or 3 years when drivers reach the age of say 65 or 70 onwards.

Franjam says:
9 November 2014

Why say no to re-testing older drivers?
I’ve been driving since 1959 and have a clean licence. I’m a member of RoSPA Advanced Drivers which means I must submit for a re-test every 3 yrs.
I believe that everyone should be re-tested every 10yrs when renewing their Photo licence regardless of age. That would seriously reduce the accident rate by getting rid of some of the incompetent drivers that are on the roads today.

I touch Wood, I passed my test in 1946 first year of Notts goose fair , I passed with flying colors here in uk. 1950 I went to live in Africa [east Africa ] , 63′ to South Africa , ’69 Rhodesia, ’83 South Africa , 2001 U.K. & am still here and driving . All those years I have had a full comp,. Insurance & I have proof in letters from the Insurance Co’s and I have had NO ACCIDENT NOR CLAIM. but the insurance goes up WHY must I pay for others Faults??? Also I have had a “few” wild animals chase me.!

It’s all about increased risk I suppose, based on the insurers statistics. What might happen as much as what has happened. Have you shopped around or tried a broker? Some insurers will be better with more elderly people than others.

Congratulations, John, on your long claim-free driving record. But as Malcolm says, insurance is risk-based and spread to keep the premiums affordable. It is indisputable that claims risk increases with age notwithstanding that older drivers are some of the better and more cautious ones [their mileage is low and they don’t do much driving at night, for instance]. However, there are other elements to insurance like location and type of motor vehicle, plus there has been a small increase in Insurance Premium Tax this year.

Unfortunately none of us can hope to live as long as the Nottingham Goose Fair which is believed to have started around 1285. It did not take place during the Second World War so your earliest recollection of it was when it resumed in 1946. I hope you enjoyed the Dodgems.