Drivers over 75 don’t deserve insurance discount, official says

Drivers age 75 and above in Massachusetts don’t deserve the 25 percent discount on their auto insurance premiums that state law mandates, according to preliminary claims data being reviewed by insurance industry officials.

Daniel Johnston, president of the Automobile Insurers Bureau of Massachusetts, which represents some of the state’s smaller insurers, says his organization is starting to analyze industry-wide claims data from 2005, 2006, and 2007 for Massachusetts drivers between 65 and 74 and 75 and above. Prior to 2005, state claims data was only collected for the over-65 group as a whole.

Johnston says his preliminary analysis shows both the 65-74 group and the over-75 group cause fewer injuries to people than all other adult drivers. But the records also show that drivers over 75 get involved in more accidents causing property damage than other adult drivers, while drivers 65 to 74 get involved in fewer property damage accidents than other adult drivers.

Johnston says he wants to review 2008 claims data before reaching any final conclusions, but he says the information so far is persuasive. “It’s probably going to show that the over-75 group doesn’t deserve the 25 percent discount,” he says. “It doesn’t appear it’s justified.”

An unjustified discount could have implications for other drivers. In general, industry officials say, companies that are forced to lose money by giving an unwarranted discount to one group offset that loss by assessing surcharges on other groups.

Under Massachusetts laws approved in 1978 and again in 2007, drivers 65 and over are given an automatic 25 percent reduction in their auto insurance premiums whether they’re good drivers or not. Industry officials say the senior auto insurance discount was initially approved in the wake of a failed 1977 experiment with auto insurance competition and was approved a second time as the state embarked on its current experiment with “managed competition.”

The 25 percent reduction has never been analyzed to see if all older drivers are deserving of such a financial break, primarily because claims data has always been gathered for all drivers over 65 and not subsets of that group.

But with industry research raising concerns that driving skills deteriorate with age, the state’s automobile insurers, with the approval of the state insurance commissioner, began gathering separate claims data in 2005 on drivers 65 to 74 and 75 and above.

Johnston declined to release any detailed information on accident statistics until a fourth year of information could be analyzed.

The new information is surfacing in the wake of a rash of accidents involving older drivers, some of them causing fatalities. The incidents have raised concerns that older drivers need to be regulated more closely. One bill would require drivers over 85 to take a road and vision test every five years instead of every 10 years. The bill was originally filed four years ago and periodically garners attention when an accident involving a senior driver occurs.

Senator Stephen Buoniconti of Springfield, cochair of the Legislature’s Financial Services Committee, said he is very familiar with issues surrounding older drivers from his previous work as a prosecutor in a motor vehicle homicide unit. He said he would review any new data on the auto insurance discount but acknowledged that lawmakers are concerned about how to handle the older driver issue.

“This is political. Seniors vote religiously,” he said. “Members are cautious about changing the rules with seniors.”

Beth Duggan, associate professor of gerontology at the McCormack Graduate School of Policy Studies at UMass-Boston and a spokesperson for Safe Roads Now, a coalition of elder groups focused on road safety issues involving elder drivers, said she couldn’t comment on the report from the Automobile Insurers Bureau. She said she would be personally skeptical of any group that wouldn’t at least release a summary table of its data.

Massachusetts Insurance Commissioner Nonnie Burnes also declined comment.

Information about older drivers is inconclusive. As a group, they tend to be better drivers than the rest of the population, primarily because they self-regulate themselves. They tend to go out only when the weather is good, they don’t take chances, and they drive slowly.

Despite a growing number of older drivers on the road, research by the Insurance Institute for Highway Safety indicates crash deaths among drivers 70 and older fell 21 percent from 1997-2006, reversing what had been an upward trend.

There is some evidence that fatalities and crashes are elevated for drivers over 85 when viewed through the prism of how many miles they drive. People over 85 have more fatal crashes per 100 million miles traveled than any other age group. Yet those statistics are somewhat misleading because drivers over 85 don’t tend to drive that much and they’re also more fragile, so their accidents more frequently result in their own deaths.