A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 19, 2021

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Important facts to know...

  • Insurance quotes don’t ask if you are retired
  • Retirement often reduces the amount of driving you do in a year
  • There are low mileage discounts offered by many insurance companies

When you retire, it’s important to see if this has an impact on the cost of auto insurance. In many instances, you might qualify for some discounts because you’re no longer commuting back and forth from work.

The moment you retire, it’s a good idea to explore your coverage in depth and get quotes from more insurance companies. Enter your zip code right here to compare quotes specifically for you.

How Retirement Affects Auto Insurance

Retirement does not directly affect your auto insurance. When you get quotes online, insurance companies ask for the following information:

  • your age
  • your gender
  • your zip code
  • the type of car you drive

They do not ask whether you are retired.

Although insurance companies do not directly reward or penalize based on retirement, there are ways that a retirement status will affect your auto insurance.

The most common way retirement will change your insurance status is that you are no longer commuting back and forth to work every day.

You might drastically reduce the number of miles that you put on your vehicle.

Insurance companies will often calculate the cost of insurance premiums based on how much time you spend on the road. The longer you are on the road, the more you are at risk for being involved in an accident.

As soon as you reduce the amount of time you are on the road, your premiums will drop.

Retirement is different for everyone and therefore you have to take the time to look at coverage based upon how things have changed for you. Once you have done this, you can also start to look at discounts that might be available to you.

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Determine the Coverage You Need

Once you retire, you need to look at your auto insurance coverage. Various aspects could have changed now that you are no longer working 40 hours a week.

Some changes could include:

These are different for everyone and therefore you have to take into consideration what you are going to be doing now that you are retired.

You might have a pension and 401(k) coming in, which allows you to purchase a luxury vehicle you have always had your eye on.

In this instance, you might be spending more on insurance premiums because the cost of the vehicle is higher and therefore replacement costs are going to be higher as well.

You might be taking it easy now that you are retired, spending most of your time at home or within your neighborhood. If you reduce your mileage dramatically, you might feel comfortable with reducing some of your auto insurance coverage.

You might also go to the other extreme and decide that now that you have the time, you want to take more road trips. You might want to visit grandchildren, visit all of the national parks, or start working on your bucket list.

Whatever it might be, if you are spending more time on the road, you might want to explore a higher level of coverage to ensure that you are protected against everything that might happen.

You should go above and beyond the state minimums for liability coverage and consider adding collision and comprehensive coverage. Should something happen, you want to know that insurance will accept the claim and take care of the repairs after you pay the deductible.

Discounts You May Qualify for After Retirement

All sorts of discounts are available from insurance companies. These vary from company to company, which is why it’s important to get quotes from several. It will allow you to see who has the best rates.

It’s possible to get the same level of coverage from all of the companies, so it ultimately comes down to the reputation that the insurance company has as well as the rate they are willing to offer you on your premiums.

Some discounts you might qualify for after retirement include:

  • Low mileage
  • Homeowner
  • Association discounts

You have to remember that your financial status has likely changed because of retirement. For some people, the income is more because of pension and other retirement accounts. For others, the income changes from a salary to Social Security benefits.

Regardless of what category you fall into, you need to take these possibilities into consideration when working with auto insurance companies.

Various association discounts might be available. These organization associations include groups like AARP, veteran organizations, and more.

If you are a member of one of these, you will want to make sure to mention it to the insurance company to see if it gives you access to better rates.

Ultimately, auto insurance is affected by retirement. While it doesn’t directly affect a policy, there are going to be new life changes that take place that will have an impact on the coverage you need as well as what you pay for your premiums.

Compare car insurance quotes right here by using our free rate tool below.