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Millions Receive $100 From State Farm, Plus 15 Ways Seniors Can Save More on Car Insurance

The State Farm refund is welcome news, and these tips can help lower your bill even more.

By Jenny Cohen and Sara Albertelli , Edited by Chris Kissell

Updated March 4, 2026

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Good news for drivers: State Farm is refunding $5 billion to its auto insurance customers, paying out an average of about $100 per vehicle in what the company says is the largest dividend in its history. The company said refunds will begin this summer and will go to policyholders, covering about 49 million vehicles.

The payout follows stronger-than-expected financial results in 2025, when the insurer collected more in premiums than it paid out in claims. State Farm also said it has lowered car insurance rates in 40 states by an average of 10%, a change expected to save customers about $4.6 billion annually.

While that could provide welcome relief for drivers, car insurance remains a major expense for many households. If you're retired and living on a fixed income or looking to supplement your Social Security, finding ways to reduce recurring bills can make a real difference. Here are 15 ways you can lower your car insurance costs.

Shop around

One of the best ways to save money on car insurance is to shop around and compare costs when looking for a new policy.

By shopping around, you can find the provider that offers the best price for the coverage you need.

Shopping for cheaper auto insurance? Enter your zip code here to get started.

Bundle your insurance policies

Bundling your policies is a great way to save on car insurance as well as other insurance coverage.

Insurance companies typically offer a discount to those who purchase multiple types of insurance, including car insurance, home insurance, and other types of coverage.

Reduce your coverage for an older car

If you have an older car, chances are good that its value has plunged over the years. If the car is old enough, carrying collision and comprehensive coverage might no longer make sense.

Although dropping these coverages can save you money, remember that without them, you will be responsible for paying out of pocket for all repair bills to fix your car.

Resolve $10,000 or more of your debt

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.¹ <p>Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 45% before fees, or 20% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating. "Debt-Free" applies only to enrolled credit cards, personal loans, and medical bills. Not mortgages, car loans, or other debts. Results vary.</p>

Consider insurance costs when buying a new car

If you're thinking of buying a new car, call your insurance company and ask how much it will cost to insure the models you're interested in.

Knowing this information can help you buy a car with lower insurance costs, which can save you a lot of money over the vehicle's lifespan.

Take a defensive driving course

Some insurance companies offer a discount to seniors and others who complete a defensive-driving course.

Participating in a driving course can be time well-spent if you can save money on insurance.

Ask about senior discounts

Some insurers offer discounts to drivers who are 50 or older. So, ask your insurance company what type of senior price breaks are available.

Don't Miss: 7 warning signs you're paying too much for car insurance.

Check on a low-mileage discount

Upon retirement, you can ditch your commute and the extra miles you were putting on your car each day.

Driving fewer miles might get you a discount on the price of your insurance. Talk to your agent or a company representative to see if your insurer offers price breaks to those who drive relatively few miles annually.

Think about raising your deductible

One way to cut back on the cost of your insurance is to raise your deductible. This should result in lower premiums.

However, remember that you are responsible for paying your deductible before your car insurance company starts to pay to cover a claim.

Keep your driving record clean

Insurance companies reward good drivers, so keeping your driving record clean can help you keep costs down.

If you steer clear of moving violations or accidents, there's a good chance you'll be rewarded with lower rates.

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.

For a limited time, you can get your first month free with a Single Payment home warranty plan.

Get a free quote

Keep your car well-maintained

Keeping your car in good running shape might prevent a sudden breakdown that can lead to an accident.

Not only does proper maintenance keep you safe, but it also reduces the likelihood of getting into a wreck that might drive your car insurance costs higher.

Move to a neighborhood with lower insurance rates

Few people would move just to save money on car insurance. However, if you plan to move anyway, a side benefit might be lower insurance rates.

Insurers often consider the neighborhood in which you live when setting rates. For example, people living in one part of the city might pay higher costs on average than someone who lives across town.

Sign up for a safe-driver program

Some insurance programs have safe-driver options in which you agree to let the insurer monitor your driving habits in exchange for a potential discount.

A provider may keep tabs on how you drive, where you drive, and when you drive, for example.

Who actually has the cheapest auto insurance in your state? Check your zip code here.

Check on anti-theft options

If your car is equipped with an anti-theft device, it might result in a discount. Check with your insurance company to see if it offers this option.

Pay your bill ahead of time

Many people pay their insurance premiums monthly. However, if you're willing to pay up to six months or a year in costs at once, you might get a discount.