Older Boomers May Have Special Insurance Needs

The first baby boomers (born between 1946 and 1964) are turning 65 this year, but the youngest are as young as 47.¹ It follows that the lifestyle decisions and financial matters of individuals at the forefront of the boomer generation are likely to differ substantially from those who still have many years left in the workplace.

As baby boomers enter a new phase of life that may include retirement, they could possibly find themselves exposed to new or different hazards. Here’s a look at some driving and home safety issues that are specific to older Americans, and some strategies to help make the most of the financial protection associated with their insurance policies.

Driving Down Auto-Related Risks and Costs

Older drivers suffer a higher rate of fatal crashes, second only to young drivers, who are typically less seasoned and often more reckless.² One possible explanation is that older people may be more easily harmed in an auto accident and more likely to experience serious medical complications as a result of their injuries. It’s also common for people to experience impaired vision, memory, and flexibility as they age.

Consequently, seniors may want to consider driving a car that not only is comfortable to climb in and out of and easy to operate but also affords a high level of physical protection. Features such as keyless entry, wide-angle mirrors, power windows and seats, and dashboards with simple, large controls and easy-to-read instrumentation can also make driving more manageable.

One might assume that auto insurance rates rise with age like life insurance premiums, but that’s not necessarily the case. Some companies offer premium discounts for drivers 55 and older who have safe records because they are often less inclined to speed or drive aggressively. Driving habits, such as how many miles are driven daily and the frequency of traveling long distances, can also affect insurance rates.

In addition, many companies offer premium reductions to drivers who complete certain mature-driver courses, which tend to focus on accident prevention and the challenges aging drivers might face on the road.

Protecting Your Home Investment

A home is often the cherished center of family life, but it may be a particularly valuable asset for a homeowner who has owned it for many years. Despite recent troubles in the housing market, nearly one-third of American homeowners own their homes free and clear.³

If you have lived in your home for a long while, building costs may have risen more than you realize. If disaster should strike before you have adjusted your policy limits accordingly, you could learn too late that you are underinsured. It’s also possible that you have made major improvements that prompt the need for additional coverage. If you have acquired valuable items such as jewelry, artwork, or antiques, there are circumstances when specialty coverage may be more suitable.

Many retirees have more free time and enjoy traveling. A reliable alarm system can help keep your home protected while you are away from home, and it may also earn you a significant discount (possibly as much as 15 to 20 percent) on a standard homeowners policy. Improvements that make your home more disaster-resistant (such as installing storm windows or shutters, reinforcing the roof, and modernizing electrical or plumbing systems) could also result in a lower insurance premium.

If you ever need to file a claim, having an updated inventory of all your furnishings and other belongings may help expedite the claims process. It’s also a good idea to review your insurance coverage with your agent on an annual basis to make sure that your home, auto, and other personal property are adequately covered.

1) CNN.com, May 9, 2011
2) Insurance Information Institute, 2011
3) U.S. Census Bureau, 2009 (most recent data available)

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.