Over the years, states across the U.S. have implemented insurance-rate protections to help prevent unfair rate practices against certain classes of individuals.

For example, in 2017, New York City Mayor Andrew Cuomo proposed regulations that would prevent auto insurance companies from rating drivers based on education level and job status.

The need for these protections has been building. A 2017 report found that insurance rates in predominantly minority neighborhoods tended to be higher than what increased risk alone appeared to account for. The report highlights a notable backlash against auto insurance rate practices against vulnerable groups.

Now, some states are starting to turn their attention toward another demographic that may also need protection against auto insurance rating practices: senior citizens.

States Protecting Senior Citizen Insurance Rights

Two states in particular have moved to make senior citizens a protected class against targeted higher rates. Both Delaware and Michigan have passed or attempted to pass new laws aimed at ensuring senior drivers enjoy lower car insurance rates.

For its part, Delaware’s new law went into effect in May of this year. The law prohibits insurance companies from raising auto insurance rates on individuals solely for turning 75 or older. Instead, insurance companies in the state must treat senior residents equally and only increase their rates based on other factors that are still allowable, such as the risk of accidents based on their location, and of course their own driving records. 

According to several reports, Delaware’s seniors are now seeing an average decrease of $100 in their annual insurance rates. It appears those insured through one unnamed insurance provider have seen their rates decrease an average of $252.

Michigan, which has the highest average car insurance rate of any other state, is also taking a swing at helping out senior drivers through a few potential cost-saving legislative measures. In that state, legislators want to give senior drivers the option to purchase an insurance policy that joins with Medicare, reducing the overall cost burden on the insurance company and, therefore, lowering the insurance rate.

Many legislators in the state believe that the proposed measure does not go far enough. Both Republicans and Democrats in the Michigan state legislature are exploring additional options to help secure lower rates for senior citizens, although nothing definitive has passed as of yet.

Why Are States Moving to Protect Seniors?

The movement toward protecting senior citizens is not universal. In 2016, Progressive sought specifically to raise rates on senior citizens in Maine, based solely on age. Maine has one of the highest percentages of senior citizens of any state, making such a move a potential boon for Progressive a distinct negative for senior drivers.

Additionally, rate increases based on age run counter to long-held practices of insurance rate pricing across the country, which have tended to favor age as a factor for decreasing rates. Insurance companies that do seek to increase rates on the elderly based on age alone and not on driving record are likely pointing to data that shows older individuals are more likely to get into accidents.

The National Highway Transportation Safety Administration (NHTSA) has data that appear to indicate a slight rise in accidents once individuals reach the 70 to 79 age range, and again at the 80-plus age range. Fatal crashes, in particular, are much higher for those age ranges, especially for drivers 80 and over, where fatality rates are equivalent to the youngest drivers (16 to 17).

Nevertheless, senior citizens are also a major demographic more likely to be suffer financially from insurance rate increases not tied to anything but age. With over 13 percent of senior citizens living in poverty, many may struggle to account for car insurance rate increases while living on fixed budgets.

How Auto Insurance Rates Change by Age

Any driver can expect their age to affect their car insurance rates. Normally, however, rate increases begin to drop dramatically after the 16–17 year old age range. By ages 55–64, most drivers in the U.S. start enjoying the lowest car insurance rates of their lives. Those rates do traditionally start increasing with age, rising over 40 percent from the 55–64 age range once drivers make it into the 80-plus range.

Those age-related decreases are typically tied to a lower risk for accidents as drivers mature and become more defensive and safe drivers. Increasing rates for senior citizens follow along the same route as the increase in accident rates as shown by the NHTSA data.

While it is generally accepted that teenagers (or, by extension, their parents) will pay higher rates, and that adults will pay lower rates based on age alone, many view raising rates on senior citizens as a bit more of an affront, due in large part to the economic vulnerabilities often associated with that age group.

Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.