By the Lapera Insurance Team · Reviewed by Joe Lapera, Licensed Illinois Insurance Agent (IL Lic #100722394)
Maybe you just retired and the commute is gone. Maybe the renewal notice went up and you are wondering whether you still need everything on it. Or maybe you are an adult son or daughter helping a parent sort through the paperwork. Whichever seat you are in, the question is the same: what does good car insurance look like at this stage of life? Here is how we answer it across the desk, including the Illinois license changes that took effect in July 2026.
There is no single best company. For most Illinois drivers over 65, the best car insurance is a setup: liability limits high enough to protect your savings and home, uninsured motorist coverage that matches them, medical payments coverage that works alongside Medicare, and every discount you qualify for, including the reduction Illinois law requires for drivers over 55 who finish an approved defensive driving course.
You have spent decades building what you have: a home that is paid off or close to it, retirement savings, maybe a little set aside for the grandkids. The right auto policy is the one that keeps a single bad afternoon on the road from reaching any of that. It should also stop charging you for things you no longer need. This guide walks through each piece in plain English, what changed in Illinois this year, and the questions worth bringing to your next renewal, whether you are reviewing your own policy or helping a parent with theirs.
What Makes Car Insurance the "Best" for an Older Illinois Driver?
TL;DR: The best policy is built around what you own and how you drive now, not around a company name, and it usually means strong limits, matching uninsured coverage and every discount you have earned.
When people ask us for the best car insurance for seniors, they usually expect us to name a company. We would rather name a setup, because the company matters less than what the policy actually does. Two retirees with the same carrier can have very different protection, depending on the limits, the medical coverage and the discounts on their declarations pages.
Retirement changes the picture in two directions at once. You may drive fewer miles, at calmer hours, which can work in your favor. At the same time, you likely have more to protect and less time to rebuild it if something goes wrong. A good policy for this stage leans into both.
| Piece of the policy | Why it matters now | Our take |
|---|---|---|
| Bodily injury liability | Protects your home equity, savings and income if you cause a serious crash | Keep it strong |
| Uninsured and underinsured motorist | Pays your own injury losses when the other driver has little or no insurance | Match to liability |
| Medical payments (MedPay) | Pays accident medical bills regardless of fault, for you and your passengers | Worth a look |
| Comprehensive | Covers deer collisions, theft and other non-crash damage | Usually keep |
| Collision on an older, paid-off car | Pays to repair your own car after a crash | Judgment call |
| Liability at the 25/50/20 minimum | Legal, but thin for anyone with assets | Not enough |
Lapera Insurance Agency is a Farmers Insurance agency at 530 Barron Blvd in Grayslake, Illinois. Our team has served Illinois families since 1993, with over 40 years of combined experience, and many of our longtime clients have reviewed their policies with us right through retirement. We write auto coverage through Farmers and the Farmers family of carriers, plus additional markets. Every guide on this site is reviewed by a licensed Illinois agent before it publishes.
What Changed in Illinois License Renewal for Older Drivers in 2026?
TL;DR: Starting July 1, 2026, Illinois requires a road test at renewal only from age 87, up from 79, while drivers 79 and older must renew in person and license terms shorten with age.
Illinois updated its rules for older drivers with House Bill 1226, signed on August 15, 2025 as Public Act 104-0169 and effective July 1, 2026. Here is what the law does, in plain terms:
- Road tests now start at 87. Before July 1, 2026, a driving test at renewal began at age 79. Now an applicant renewing at 87 or older must show, by an actual demonstration, the ability to drive safely.
- In-person renewal from 79. Drivers 79 and older must renew in person rather than online or by mail.
- Family members can raise a concern, but not anonymously. An immediate family member may report a medical condition that interferes with safe driving. The report must be in writing and include the name of the person submitting it. The Secretary of State may not accept or act on anonymous reports.
For more detail on how renewal works in practice, see the Secretary of State's announcement. License terms are set separately by 625 ILCS 5/6-115: a standard license generally runs 4 years, a license issued at ages 81 through 86 runs 2 years, and a license issued at 87 or older runs 1 year.
Why does this matter for insurance? Your policy lists the licensed drivers in your household. A renewal that does not go through, a new restriction, or a decision to stop driving changes who the policy should cover, so it is worth a quick call to your agent when any of those happen.
If you are worried about a parent's driving, the new reporting rule is a last resort, not a first step. Most families start with a conversation and a visit to the doctor. Whatever you decide, keep the insurance in step: a parent who is still licensed and driving needs to stay on the policy, and a parent who has stopped should tell the agent.
How Much Liability Coverage Protects What You Have Built?
TL;DR: Illinois minimum limits of 25/50/20 are too thin for anyone with home equity or savings, so most retirees should look at 100/300/100 or higher and consider an umbrella on top.
Liability coverage pays for the other people when you cause a crash: their medical bills, their lost wages, their car. Illinois only requires $25,000 per person, $50,000 per accident and $20,000 in property damage, as our Illinois auto insurance guide explains. A single serious injury can run well past $25,000, and anything above your limit can become your responsibility.
Here is the part retirees often have not thought through. Illinois law exempts most retirement plans, including IRAs, from judgments under 735 ILCS 5/12-1006, but the homestead exemption under 735 ILCS 5/12-901 protects only $15,000 of each owner's interest in a home. For a couple with a paid-off house, that leaves most of the equity unshielded. This is general information, not legal advice; an Illinois attorney can tell you how it applies to you.
That is why we usually start the conversation at 100/300/100 and go higher when there is more to protect. The jump from minimum limits to solid ones is usually a smaller premium difference than people expect. If you own a home and have meaningful savings, the next layer is a personal umbrella policy, which sits on top of your auto and home liability.
Wondering how much coverage sits on top of strong auto limits? Our Illinois personal umbrella insurance guide walks through how umbrella coverage works and who should consider it.
Do You Still Need Uninsured Motorist Coverage If You Are on Medicare?
TL;DR: Yes, because Medicare pays medical bills but not pain and suffering or help around the house, and uninsured motorist coverage is what pays those losses when the other driver has no insurance.
This is one of the most common questions we hear from clients turning 65, and it is a fair one. If Medicare will cover my doctor and hospital bills, why pay for uninsured motorist coverage too?
Because medical bills are only part of what a serious crash costs. Medicare does not pay for pain and suffering. It does not pay a neighbor to drive you to appointments or someone to help with the house while you heal. When an at-fault driver has insurance, those losses can be part of a claim against them. When that driver has none, uninsured motorist bodily injury coverage is designed to step in for them, up to your limits.
Illinois law makes it simple to get this right. Under 215 ILCS 5/143a-2, uninsured motorist coverage is included in an amount equal to your bodily injury liability limits unless you reject that in writing, and underinsured motorist coverage comes with it once your uninsured limits are above the state minimum. If you raised your liability limits but signed away matching uninsured coverage years ago, it is worth fixing. Your liability protects everyone else from you; your uninsured and underinsured coverage protects you and your passengers from everyone else.
How Does Medical Payments Coverage Work With Medicare?
TL;DR: When MedPay applies to a car accident, it generally pays before Medicare, which can take the first bills off the table, cover passengers who are not on Medicare, and keep the paperwork simpler.
Medical payments coverage, or MedPay, pays medical and funeral expenses when a covered person is hurt in an accident, no matter who is responsible, according to the Insurance Information Institute. It covers you, your family members and your passengers.
Here is how it fits with Medicare. Medicare.gov explains that when no-fault or liability insurance applies to an accident, that insurance pays first and Medicare pays second. Medicare may make a conditional payment if the other insurance does not pay promptly, and it will later recover what the primary payer should have paid. The Centers for Medicare & Medicaid Services says in its Medicare Secondary Payer Manual (Chapter 1, Section 20.5) that MedPay is a form of no-fault insurance even when it is part of an auto policy.
- It pays the first dollars. Up to its limit, MedPay can handle accident bills that might otherwise run into your Medicare deductible and coinsurance, depending on the policy and the bills.
- It covers your passengers. A grandchild, a friend or an adult child in your car may not have Medicare at all.
- Tell your providers about it. Medicare.gov advises telling your doctors and other providers when you have coverage in addition to Medicare, so the right payer is billed and claims are not delayed.
- Keep your paperwork. If Medicare pays conditionally, it may later seek repayment. Medicare Advantage and drug plans handle that process through the plan.
A retired couple from the northern suburbs is stopped at a light when an uninsured driver hits them from behind. Both are hurt, along with their 10-year-old grandson in the back seat. In this illustration, their MedPay pays the first round of emergency room bills for all three of them, including the grandson, who is not on Medicare. Medicare handles the follow-up care for the couple. Because the other driver had no insurance, their uninsured motorist coverage, set equal to their 100/300 liability limits, is what responds to the months of pain, missed activities and paid help at home. All figures and outcomes are illustrative, not a quote or a coverage determination; actual claims depend on the policy and the facts.
Should You Drop Collision Coverage on a Paid-Off Car?
TL;DR: Possibly, if the car is worth little compared with what collision costs and you could replace it from savings, but comprehensive is often worth keeping for deer and theft.
Once the loan is paid off, no lender requires collision or comprehensive coverage, so the choice is yours. The Insurance Information Institute suggests considering dropping collision or comprehensive on older cars, and offers a rule of thumb: if your car is worth less than 10 times the premium for that coverage, buying it may not be cost-effective.
We would add one condition. Only drop collision if you could repair or replace the car from savings without straining your budget. If losing the car would leave you without a way to get to appointments or the grocery store, the coverage may be worth more to you than the math suggests.
Comprehensive is a separate decision, and it is often worth keeping. It covers damage that does not come from a crash with another car, such as hitting a deer on a county road at dusk, or theft. It typically costs less than collision, and on a car you depend on, it can be good value.
Look up what your car is actually worth today, then ask us what the collision and comprehensive portions of your premium cost on their own. With both numbers in front of you, the decision usually becomes clear in a couple of minutes.
Which Discounts Should Illinois Drivers Over 55 Ask About?
TL;DR: Start with the defensive driving reduction Illinois law requires for drivers over 55, then ask about telematics, homeowner, bundling and paying in full.
Illinois has one auto discount written into law. Section 143.29 of the Illinois Insurance Code (215 ILCS 5/143.29) says auto liability rates must include an appropriate reduction, as determined by the insurer, for insureds over age 55 who complete an approved defensive driving or crash prevention course of at least 8 hours. The reduction lasts 3 years from completion. You have to send the insurer proof, and a driver whose license was suspended or revoked in the previous 36 months, or who was recently surcharged for claims or violations, may not qualify yet. The Secretary of State's Safe Driver Insurance Discount Program page explains how to find an approved course.
Farmers lists a Mature Driver discount "for drivers over age 55 who have completed state-approved safe driver training in the last three years." Farmers notes that not all discounts are available in every state, so we confirm what applies on your actual quote.
- Telematics. Farmers Signal® offers an initial discount for enrolling and may reward safe driving at renewal, though riskier driving could raise the premium. It often suits careful, lower-mileage drivers.
- Homeowner. Farmers offers a homeowner discount for policyholders who own a residence, regardless of who insures it.
- Bundling. Insuring home and auto together is often one of the larger discounts; see whether to bundle home and auto in Illinois.
- Paying in full at the start of the term, if it does not drain your emergency fund.
For every category, see our complete guide to Illinois auto insurance discounts. For what drives the price itself, read how much car insurance costs in Illinois by driver profile.
What Happens to Your Policy When a Spouse or Driver Stops Driving?
TL;DR: Tell your agent as soon as a household driver stops driving, because the right change depends on the carrier and on whether the car stays in the household.
Sometimes a spouse decides on their own that it is time to stop driving. Sometimes it follows a health change, or a conversation with the family. However it happens, it is an emotional moment, and the insurance is the last thing anyone wants to think about. A short call keeps it from becoming a problem later.
- Tell your agent. How a non-driving household member is handled depends on the carrier and the situation, so ask what options apply to your policy rather than assuming.
- Keep liability on any car that stays. If the car stays in the household and anyone might drive it, it still needs to be insured. A car that will not be driven at all is a separate conversation.
- Update the cars, too. If a car is sold or given to a grandchild, remove it from your policy once the new owner has coverage in place.
- Keep a photo ID. Under 15 ILCS 335/12, a standard Illinois identification card carries no fee for applicants 65 or older.
Ready to have someone look over the whole policy? Visit our auto insurance page, or request a quote and ask us to review your limits, MedPay and discounts at the same time.
The Bottom Line
The best car insurance for an older Illinois driver is not a brand name. It is a policy with liability limits that protect your home and savings, uninsured and underinsured coverage that matches them, medical payments coverage that works alongside Medicare, and every discount you have earned, starting with the reduction Illinois law requires after an approved defensive driving course.
From there, trim only what you truly no longer need, like collision on an older car you could replace yourself, and keep the policy in step with life changes, including the new license rules and the day a spouse decides to stop driving. If you would like a second set of eyes, send our Grayslake office your declarations page, or request a quote, and a licensed agent will walk through it with you or with the family member helping you.
Related Questions
Do you need a membership program to get a senior car insurance discount in Illinois?
No. Under 215 ILCS 5/143.29, every insurer must include an appropriate reduction, set by the insurer, for insureds over 55 who complete an approved defensive driving or crash prevention course of at least 8 hours. It lasts 3 years. Choose a course approved by the Illinois Secretary of State and send your insurer the completion certificate.
Do Illinois drivers over 79 still have to take a road test?
Not until age 87, as of July 1, 2026. Public Act 104-0169 moved the renewal road test from age 79 to age 87. Drivers 79 and older must renew in person, and license terms shorten with age: 2 years for licenses issued at 81 through 86 and 1 year at 87 or older.
Does Medicare pay for injuries from a car accident in Illinois?
Medicare can cover accident care, but when no-fault coverage such as MedPay or liability insurance applies, that insurance pays first and Medicare pays second, according to Medicare.gov. Medicare may make conditional payments and later recover them. Tell your providers about your auto coverage so the right payer is billed.
Should seniors drop collision coverage on an older car?
Sometimes. The Insurance Information Institute suggests collision or comprehensive may not be cost-effective if the car is worth less than 10 times the premium for that coverage. Only drop collision if you could replace the car from savings, and consider keeping comprehensive for deer collisions and theft.
How much liability coverage should a retiree carry in Illinois?
More than the 25/50/20 state minimum if you own a home or have savings. We often start at 100/300/100 and go higher with more assets, then add a personal umbrella. Illinois exempts most retirement accounts from judgments, but the homestead exemption covers only $15,000 per owner. This is general information, not legal advice.
Last reviewed October 2026 by Joe Lapera, Licensed Illinois Insurance Agent (IL Lic #100722394). Figures verified against the sources linked above on that date.