Motor insurance: Higher premiums for the old 'justified'

Wednesday, 06 June 2007

Over-65s are currently enjoying longer and more active lives and it is fair that they pay more for their travel and motor insurance, an industry body has claimed.

The Association of British Insurers (ABI) has issued a report which highlights the efforts the insurance industry has made to accommodate older generations but also explains the reasons for their higher premiums.

According to the report 45 per cent of people over 70 currently hold a driving licence compared to 15 per cent three decades ago.

That is the equivalent of four million people and this number will rise to ten million by 2050 when over-70s will account for 40 per cent of the population.

Responding to this demographic shift, the upper limit for insuring motorists is now 82, but these drivers have more risks for insurers.

Older motorists claim more frequently and on average claim for more than younger drivers and the ABI says this accounts for their higher car insurance costs.

At the other end of the spectrum, the ABI has asked four young drivers to be forced to take a year long training course, effectively raising the driving age to 18 because at the moment one in five young drivers has a crash in their first year on the road.

This accounts for high motor insurance premiums for young motorists.

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