October 25 2014 Latest news:
Adam Aiken, Editor
Tuesday, April 24, 2012
A new agreement drawn up with the support of the insurance industry should make it easier for older people to get cover for their motoring and travel.
The deal means that consumers struggling to take out policies simply because of their age will be pointed towards help elsewhere.
The agreement, which has been drawn up with the Association of British Insurers (ABI) and the British Insurance Brokers’ Association (Biba) and is backed by the government, involves an automatic referral to an alternative provider who can meet the applicant’s needs or to something such as Biba’s Find a Broker service.
As well as all ABI and Biba members, it is thought that insurance providers that are not part of either trade group will also comply with the scheme on a voluntary basis.
“The insurance industry wants to ensure that older people get the best possible insurance deals, by having as wide access to the motor and travel insurance markets as possible,” said ABI director-general Otto Thoresen.
“This agreement shows how the industry can work with government to increase access to insurance and improve transparency, while preserving insurers’ ability to assess and price risk fairly.”
A number of insurers stop offering cover, or give prohibitive quotes, to older customers once they hit a certain age.
The industry staunchly defends its right to use risk-based pricing – the idea that premiums are set according to the perceived risk of someone making a claim – but charities and campaigners point out this means customers can find themselves unable to afford insurance as soon as they hit a certain age.
Clare Francis, of Moneysupermarket.com, said: “This announcement is good news for older people who may have struggled to access cover because of their age.
“Although many people would say with age comes experience, insurers classify older drivers as more risky when they reach a particular age. This varies depending on the provider.”
A number of providers specialise in offering protection to older people – and to over-50s in particular – so you should be able to find a suitable policy if you look hard enough.
But don’t rule out other insurers. A provider that does not brand itself as a “specialist” for a particular age group might still offer a competitive quote.
“There are insurers that specialise in cover for older drivers, but people shouldn’t assume these are the only companies that will offer them cover,” said Ms Francis.
“While today’s announcement highlights the fact that some insurers do stop offering cover for drivers above a certain age, not all do.
“There are some mainstream insurers, including LV, Tesco, Barclays, Nationwide and Swiftcover, that will insure 90-year-olds.”
Meanwhile, premiums for travel insurance often jump when someone turns 66 because insurers deem older people to be more at risk of lodging claims.”
Ms Francis said: “We are unlikely to see prices fall significantly on the back of the ABI’s announcement, but it should have some impact, and I would expect it to become easier for older travellers to find affordable cover and make the most of their retirement.”