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More than other age groups, people over 65 are reluctant to consider changes in their insurance needs. Consumers of all ages tend to get locked into policies they've owned for a long time. Older consumers are even more reluctant to change, and the companies count on it.

But circumstances change and the best insurance solutions change as well. With grown children, plus homes and cars that are paid off, the old reasons for having insurance may not make sense today.

Further, premiums for even the same coverage change, and so do the comparative rates charged by competing insurance companies. Insurers often have different financial reasons for their decisions on rates, and these may show up in major price variations for the identical coverage.

Insurance is hardly a minor household expense, either. According to the 2011 survey of consumer household expenditures by the U.S. Department of Labor, average after-tax income of households led by people age 65 and older was $42,326, and they spent $39,173 during the year. Of this amount, health insurance spending averaged $3,076, car insurance cost $894 and $280 was spent on life insurance and other types of personal insurance.

Home insurance was included in the $1,509 that the average older consumer spent on home maintenance, repairs, insurance and other related expenses. If only one-third of that was spent on insurance - about $500 - the total average spending on insurance by older consumers would be about $4,750. That's an eighth of total household spending just for insurance, or nearly as much as the older household's average spending on food - including food at home and at restaurants.

Beyond lower rates, it's also important to review each year whether the amount and types of coverage you need have changed.

Many seniors have older vehicles and do not need expensive low-dollar deductibles for collision and comprehensive coverage. Consider selecting higher deductibles. However, do not scrimp on liability protection or uninsured motorist coverage. One of the likely reasons that average spending on insurance has dropped since the recession is that people are dropping their car insurance entirely. You need to make sure you're covered should you be in an accident with an uninsured driver.

Insurers offer lower rates for low-mileage motorists. If you drive less than in the past, you might qualify for a lower rate. And more and more insurers are offering usage-based policies keyed to devices in your car that measure actual driving distances and patterns.

Read More: Source

Posted 10:36 AM  View Comments

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