As your parents age, they may need help with routine tasks like managing their finances, navigating the health care system and finding a car insurance policy that meets their needs. If your parents drive at all—whether they get behind the wheel every day or only occasionally—they still need car insurance.
Not only is it required by law in nearly every state, but having adequate auto insurance coverage will help protect your parents' finances if they're in an accident. However, the types and amount of coverage they need may change as they get older. Here's what you need to know about finding the right policy for your elderly parents.
How to Insure a Car for Your Elderly Parent
Finding the right auto insurance policy for your parents doesn't have to be complicated. Following these steps can help you get coverage that meets their needs and fits their budget.
1. Evaluate Your Parent's Coverage Needs
The coverage your parent needs as they age will typically depend on a few factors, including:
- How much they drive: If your parents already have a policy, have been driving the same car for several years and maintain similar driving habits as when they were younger, it may be best to stick with the coverage they have. However, if they drive a lot less than they used to, pay-per-mile coverage may help reduce their insurance costs.
- What they drive: Check the market value of their vehicle. If it isn't worth much, carrying collision and comprehensive may not make financial sense. Dropping coverage to the legal minimum can help them save.
- Who drives the car: As people get older, it's not unusual for them to need other people to drive them to appointments and help them run errands. Most insurance policies cover drivers not named on a policy if they occasionally drive a vehicle they don't own—as long as they have the owner's permission. If someone other than your parents drives their car regularly, you should add them to your parents' policy.
2. Choose Coverage Types
The types of coverage your parents need varies based on the laws in their state, whether they have an auto loan, the value of their vehicle and how much risk they're willing to assume. Here's a brief overview of the most common coverage types to choose from.
- Liability: Mandated by law in nearly every state, liability coverage pays for other people's injuries and damage to their property if one of your parents is found to be at fault in an accident.
- Comprehensive and collision: These coverages protect against physical damage to your parent's car. Comprehensive covers damage that isn't the result of a collision, such as a caved-in room from a falling tree limb, and collision insurance covers damage from a crash. Although not required by law, lenders typically require car owners to have these coverages if they have an auto loan.
- Personal injury protection (PIP) and medical payments (MedPay): PIP and MedPay cover the policy owner's medical bills after an accident, no matter who is at fault. They are required in some states and optional in others.
- Uninsured (UI) and underinsured (UIM) motorist coverage: UI pays for injuries and property damage after a hit-and-run accident, and UIM covers accident-related expenses that exceed the at-fault driver's policy limit. Some states require these coverage types; in others, they're optional.
- Add-ons: For a fee, you can include gap coverage, rental car reimbursement, custom parts and equipment and a slew of other optional add-ons to your parent's policy for additional protection.
3. Adjust Coverage Limits
Because policies with lower limits cost less than those with higher limits, it can be tempting to reduce or remove coverage to save money. However, if your parent is in an accident, they could find themselves on the hook for out-of-pocket expenses if they don't have adequate policy limits.
When deciding how much coverage to purchase, consider the assets your parents want to protect. To determine whether paying for comprehensive and collision makes sense, compare the market value of the vehicle with the premium for maintaining the coverage and the deductible they'd have to pay if they file a claim.
4. Review Senior Discounts
Most insurance companies offer an array of discounts, some of which are specifically designed for older drivers. Here are some common discounts that may help your parents save on auto insurance.
- Defensive driving: Drivers over a certain age may qualify for a discount after taking a defensive driving class.
- Retired government and military: Some insurers offer discounts to policyholders who previously served in the military or worked for the federal government.
- Low mileage: If your mom or dad is putting fewer miles on their car than they used to, they may pay less for a policy.
- Safe driving: Seniors without a history of moving violations or accidents may get a discount for being a safe driver.
- Multi-policy and vehicle: Many insurers offer discounts when you purchase multiple policies or insure more than one car.
- Senior citizen discount: Some companies offer discounts to seniors just because they've reached a certain age.
5. Shop Around
Because companies weigh criteria differently when pricing a policy and discounts can vary, your rates can differ from one insurer to the next. One of the best ways to get the coverage you need at an affordable price is to shop around and get quotes from multiple insurance companies. When comparing policies, be sure the types of coverage and policy limits are the same and all the discounts you're eligible for have been applied.
6. Regularly Review Their Policy
As your parents age, their driving habits may change. Reviewing their policy regularly can help ensure their insurance coverage continues to meet their needs, and they are receiving the lowest rate for which they qualify. It's a good idea to review policies annually, or when their driving habits change significantly or they get a new car.
Frequently Asked Questions
You probably won't be able to add your parent's car to your insurance policy if they don't live with you. A car generally needs to be titled in your name or you need to live in the same household as the person who owns the car to add it to your policy. However, if you have your parents sign the title over to you or become a co-owner, your insurance company may allow you to add their car to your policy.
It's a myth that seniors generally pay more for auto insurance. In fact, multiple factors may actually reduce the amount older drivers pay for a policy, including how much they drive and the discounts they qualify for. Insurance costs can go up, however, if your parent has gotten into one or more at-fault accidents or has been cited for disobeying traffic laws.
The only time you should cancel your parent's car insurance is if they no longer drive, and don't intend to start driving again. If they still drive, even if it's only occasionally, you should keep their policy active to protect them in case they're in an accident. A lapse in insurance coverage can cause rates to be higher once a new policy is issued.
The Bottom Line
The steps you need to take to insure a car for your elderly parent are the same as the ones you'd take to insure a car for yourself. Start by evaluating your parent's driving habits and reviewing and selecting the coverage options and policy limits you want to include. Shop around to find the best rates and discounts your parents can qualify for and regularly review their policy to ensure it still meets their needs.
Experian's auto insurance comparison tool can help you find adequate coverage that fits your parent's budget by comparing policies from top insurance providers.