The reversal of trend for Car Insurance for Over 50

Posted on July 12, 2010 | Category: Automotive Trivia

There has been a trend that has been observed if one charts out the actual value of the insurance premium against an increasing timeline in years that depicts the age of the driver.

If a graph is plotted with the premium value on the Y-Axis and the age of the driver on the X-Axis, then one will notice that the graph starts from a higher end and with progressing years, dips till the driver’s age is over sixty and then it sees a sharp increase in the value and subsequently ends at about 70 years. This trend basically depicts that the car insurance premium is the highest when the insurance is purchased for the first time and progressively dips till the driver is 50 and increases again. Following this trend the plan for car insurance for over 50 has been formed by insurance companies to segregate the section of the customers who are over the age of fifty years.

First of all let us understand the trend that we have seen all insurance plans including car insurance for over 50. When the driver is young and new and keeping all the other factors constant, it is understood that he will be enthusiastic and curious about driving. Hence the chances that he runs the car at a higher speed or try and test its power are fairly high. This is why the new driver is considered a higher risk because the chances of him getting the vehicle damaged or involved in a traffic violation are higher and hence the chances of claims being filed also become high.

This causes the insurance premium amounts to increase. But subsequently, as he becomes a seasoned driver, then the chances of making mistakes decreases thereby reducing the probability of the claims being filed decreases and hence the insurance premium amount decreases. But the trend is completely opposite for car insurance for over 50.

» Filed Under Automotive Trivia

Leave a Reply