Filenews 26 January 2025 - by Eleftheria Paizanou
It is not uncommon for elderly drivers to urgently raise the need to be treated equally, like other drivers, by insurance companies for the coverage of their vehicles.
Elderly drivers claim that insurance companies ask them to pay increased premiums and that they are sometimes denied a policy on the grounds that this category of drivers is considered high-risk for causing road accidents.
In fact, in these cases, affected elderly drivers are referred to the Consortium of Insurers. Organisations representing older people, as well as trade unions, consider the practices followed by insurance companies to be ageism and blatantly violate the human right of older people to equal treatment. In fact, they argue that international studies have shown that young drivers are at increased risk of causing accidents on the roads, due to their inexperience in driving.
Discrimination
The issue was discussed at the Session of the House of Elders, while the members of the parliamentary Working Committee, when the issue was put before them, had asked for the intervention of the state to stop the increase in insurance premiums for the vehicles of elderly drivers.
MEPs consider that elderly drivers over the age of 70 are discriminated against in relation to the amount of insurance premiums they pay to cover their vehicles. In fact, they submitted a proposal calling on the state to contribute to the payment of part of the premiums. In particular, they demanded the implementation of a premium subsidy scheme for low-income pensioners and Guaranteed Minimum Income recipients.
What does the law provide?
Despite the requests and reactions, the legislation in Cyprus ties the hands of the Superintendent of Insurance, as it cannot intervene in the pricing policy of insurance companies in relation to the coverage of elderly vehicles.
By law, insurance companies determine the amount of various premiums. In particular, the Superintendent of Insurance does not have the right to oblige an insurance company to offer any form of insurance coverage and insurance companies are free to price each risk separately and charge accordingly.
The age parameter in the EU
A study conducted by the Parliament's research service sheds light on what 17 other countries of the European Union are doing in relation to elderly drivers.
AKEL MP and chairman of the parliamentary Working Committee, Andreas Kafkalias, asked for the investigation to be carried out in order to obtain information on the practices of other countries.
17 countries responded to the call of the services of the Cypriot Parliament and from the answers they gave it is concluded that the way elderly drivers are treated varies. For some countries, age is the be-all and end-all for setting premiums, while others do not take it into account.
There are also cases of countries where the state has intervened by setting premium caps. Of course, there are some countries that have practices whereby drivers of vehicles are rewarded when they do not cause damage in road accidents by reducing the premium.
The results of the survey
According to the survey, for 13 countries age is not a factor in insurance premiums.
In particular, in Austria, Germany, France, Germany, Estonia, Spain, Lithuania, Hungary, Poland, Portugal, Romania, Slovakia and Slovenia age is not taken into account in determining motor insurance premiums, but is not a factor of discrimination for older drivers.
On the other hand, in Luxembourg and the Netherlands age is a factor leading to higher insurance premiums, due to the increased risk of accidents. To calculate the cost of motor third party liability insurance, in most countries insurance companies use data to analyze the effect of various factors on causing accidents (damages), such as engine power and vehicle category, age and place of residence of the driver, mileage and use of the vehicle. insurance and damage history.
Bonus-Malus
At the same time, in several countries the "Bonus-Malus" system is applied to determine the level of premiums. With this formula, driving without damage is rewarded with a bonus (discount on insurance premiums).
On the other hand, insurance premiums must be increased in case of accident and damage. In some countries the group of older drivers records the fewest road accidents, which has a positive effect on the price of motor third party liability insurance. Many insurance companies grant discounts on older drivers' premiums because of their driving history (accident-free), driving experience, skills and greater caution while driving.
The cheapest and most expensive countries
At the same time, the study showed that some countries have specific policies in place for specific cases of older drivers. In France, older drivers take out "zero mileage car assistance" insurance policies, at a slightly higher premium, in order to have roadside assistance coverage even in front of their home.
In Germany, according to the findings of a survey carried out by the Federal Financial Supervisory Authority (BaFin) to determine whether there is unjustified discrimination against older people in the motor insurance sector, policyholders aged 63 to 67 pay, on average, the lowest premiums of all age groups.
Also, drivers over the age of 82 pay only 50% of the premium amount of 18-year-olds, who cannot take advantage of discounts.
In the Netherlands, the calculation of premiums for older drivers is carried out using the usual assessment procedures applied to all drivers, with additional specific considerations for older drivers, such as age risk assessment (slow reaction time, fragile physique, etc.), medical assessments (e.g. medical examinations after the age of 75) and driving experience.
In addition, older drivers have the possibility to appeal to the Netherlands Institute for Insurance Complaints if unfair discrimination is found in the level of insurance premiums of their vehicles.
They insure everyone, Austria and Germany
At the same time, according to the study of the Cypriot Parliament, Austria and Germany do not allow the conclusion of a vehicle liability contract to be refused. In Germany, a request for vehicle insurance can only be refused if actual or local restrictions on the insurance company's business plan prevent the conclusion of the contract or if the claimant was already insured with that insurance company and a breach of the terms of the previous contract was found.
In Sweden an insurance company can refuse to insure someone only if there are special reasons, such as actuarial reasons, due to an increased risk of an accident.
What Romania, Finland, Czech Republic and Portugal are doing
In the Czech Republic and Finland, considered elderly drivers (aged 65 and over) and young drivers (under 25) have more expensive vehicle liability insurance, as the risk of causing accidents is judged to be higher than average.
However, premiums for older drivers are lower than those for young or novice drivers. In Portugal, the insurance company has the obligation to provide the applicant with relevant information on the severity of risk factors in case of refusal to conclude an insurance contract or increase of the premium due to increased health risk. In Romania, the executive has decided to set ceilings on the cost of insurance premiums for compulsory motor insurance.
