The cost of living in the United States is constantly rising.
If your household falls under the federal poverty line, it may be impossible to stretch your budget to include something like car insurance premiums. The federal minimum wage has remained stagnant at $7.25/hour (which results in a salary of $15,000/year for full-time employees), while insurance premiums have continued to climb annually at a rate of 10 to 12 percent. Even families with more than one full-time worker may find it challenging to keep up with rising insurance rates.
While driving a vehicle without insurance is illegal in almost every state in the U.S., many individuals risk foregoing coverage in order to pay other bills. But the consequences of driving without insurance coverage can be far more expensive. If you cause an at-fault accident while uninsured, you can face fines, license suspension, medical bills, property damages, lawsuits, and even jail time.
The good news is that low income families can buy low-cost car insurance both from certain state governments and from traditional insurance companies by qualifying for special programs.
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Before determining if you qualify for a special insurance program, you might just want to see what cheap car insurance options are waiting for you. But what if you don’t know where to start your search for savings?
Insurify can help you compare affordable car insurance quotes from top-rated car insurance companies based on your personal information and driver profile. Just enter your driver information and you’ll have a list of real-time, accurate, and cheap car insurance quotes tailor-made for your risk profile and personal needs in less than two minutes.
Average annual car insurance premiums in each state
Car insurance premiums can vary quite a bit based on where you live. Factors like population density (more people means a greater risk of accidents), property crime rates, climate, proximity of wildlife, and state-determined coverage minimums can all have a significant impact on auto insurance rates. Here are the average annual premiums by state, according to each state’s Department of Insurance.
|State||Average annual premium|
|District of Columbia||$1,284|
Getting cheap auto insurance from insurance carriers
Auto insurance companies look at different factors and weigh them differently when setting the rate for a particular policy. That’s why auto insurance quotes can vary so widely from one company to another, even if you’re looking at identical coverage. Shopping around and comparing rates is critical if you want to get the best deal. It’s also important to see if you qualify for any discounts, as most insurers offer several different types.
Here are the average annual car insurance premiums for some of the nation’s biggest insurers, using data from each state’s Department of Insurance:
|Insurance company||Average annual car insurance premium|
|Nationwide / Allied||$1,227|
Keep in mind that these numbers are just averages. Your unique history and situation will have a major effect on how high your car insurance will be, so get quotes from several different insurance companies and not just the ones with the lowest average rates.
Insurify makes this process easy by allowing you to compare car insurance quotes no matter your driving record, location, or income level.
Here’s a sample car insurance quote list from a lower income user who went on Insurify to unlock savings from top-rated car insurance companies. This user fits the following driver profile: a 44-year-old female living in Fresno, CA; owning and driving a 1999 Ford Windstar; currently employed but has poor credit; has a clean driving record; electing for state minimum protection.
|Insurance Company||Monthly Quote|
Relatively speaking, these are really cheap auto insurance quotes!
Auto insurance quotes comparison empowers you to judge by a variety of criteria. Whether you want the cheapest car insurance, the lowest down payment, or the most “perks” included with your policy, Insurify and similar quote comparison platforms help you determine the best car insurance for you.
Making smart coverage choices
Making smart coverage choices can lower your premiums, sometimes by a huge factor. Start by finding out the minimum coverage requirements for your state; you’ll need to get at least that much coverage in your policy to stay on the right side of the law. Setting a higher deductible will reduce your premiums, but don’t set the deductible so high that you can’t afford to pay for repairs should an accident occur.
The type of vehicle you drive will also have an impact on your car insurance premiums. Reliable vehicles such as family sedans and minivans are usually cheaper to insure, especially if they’re used. If your vehicle is old and could be easily replaced, consider opting out of or lowering your collision and comprehensive coverage. These coverages will pay you in the event of an accident or theft, but if the cost of repairs would be more than the entire vehicle is worth, you probably don’t need this coverage.
Coverage on individual cars in the home does NOT have to be the same. Older cars that could be easily replaced may not need collision coverage, but your spouse or partner’s new car definitely does. Customizing coverage for each car will keep you from paying unnecessary expenses.
Plus, let’s dispel an insurance myth here and now: not every insurance company cares about your credit score, or even whether or not you have credit. No credit check auto insurance is available to you if you know where to find it.
Discounts available to low income drivers
Many insurance companies offer several car insurance discounts regardless of income level.
For instance, families that live together and drive together can pay together. Having multiple vehicles and/or drivers on the same auto policy unlocks multi-car and multi-driver discounts. And good student discounts abound if a driver on your policy is a high-performing student.
Here are some other major discounts that might apply to your driver profile:
- Good driver discount: If you haven’t had any accidents or traffic violations during the past three years, most car insurance companies will give you a good driver discount—though a few carriers require as many as five years of perfect driving to earn this discount.
- Defensive driving discount: Passing a licensed defensive driving course can get you a reduced rate, although you’ll likely have to retake the course every year or two to hang onto the discount.
- Driver training discount: Drivers under the age of 21 who take an approved driver training course may be eligible for a discount. Since car insurance rates for drivers under 25 tend to be extremely high, such a class could pay for itself by qualifying you for this discount.
- Reduced mileage discount: If you drive fewer than 10,000 miles per year, you can often get a better deal on your car insurance. Some carriers will require you to prove your low mileage by having you install a mileage tracker into your vehicle.
Vehicle-based discounts include:
- Multi-vehicle discount: Insuring more than one vehicle on a single policy may result in a discount.
- Safety features discount: Certain vehicle safety features can get you a better rate. For example, airbags, daytime running lights, and antilock brakes are all desirable features to insurance carriers.
- Anti-theft device discounts: Theft prevention devices such as alarms and passive disabling systems can get you a small discount on insurance. The discount usually won’t be big enough to make installing such systems worthwhile in and of itself, but if you’ve already got anti-theft features on your vehicle or you decide to get them for peace of mind, you might as well claim the discount as well.
Even if it’s not required where you live, it’s a good idea to complete a driver’s education and/or defensive driving course. This shows that you’re serious about being a safe, responsible driver and companies will reward this behavior with a discount.
Government-sponsored car insurance
The disadvantages faced by low-income families have pushed a few states to fund government auto insurance for such residents in order to keep their drivers covered and their roads secure. Government public auto insurance may be an option for low income families or individuals with disabilities and may be sponsored by federal, state, or local government.
For now, only three states in the U.S.—California, Hawaii, and New Jersey—offer their residents some kind of low-income car insurance program. However, government policies can change at any time. It’s best to contact your local DMV to find out for certain if your state offers low-cost auto insurance or other financial assistance.
California’s Low-Cost Auto Insurance Program (CLCA)
The CLCA program, created in 1999, provides liability insurance protection to low income families with good driving records in the state of California. Car insurance coverage limits set by the CLCA are lower than California’s standard minimum requirements. Drivers in the program are therefore excused from meeting the state’s requirements.
While annual premiums vary based on your county, they can range anywhere from $256 to $611. If there is a single, male driver aged 19-24 in your household, his premium will be 25 percent higher than the base rate because such drivers are considered high-risk.
This program requires that all vehicles in a household be insured through the CLCA. You cannot have liability coverage with any other insurer. There are discounts available to drivers with good driving records within the past 3 years.
Anyone who qualifies for this program is allowed to have two policies, which means you can get insurance for up to two cars. If there are two qualified drivers in the same household, each can have two policies for a total of four in all for the entire household.
To qualify for California low income car insurance you must meet certain eligibility requirements. First, there’s an income limit based on your household size.
Household size Maximum household income 1 $30,350 2 $41,150 3 $51,950 4 $62,750 5 $73,550 6 $84,350
You must also have a valid California driver’s license, own a vehicle valued at no more than $25,000, and be at least 16 years old.
The basic California low-cost auto insurance policy has the following coverage limits:
- $10,000 for bodily injury or death per person
- $20,000 for total bodily injury or death when multiple people are hurt in an accident
- $3,000 for property damage liability
For an additional charge, drivers can add:
- $1,000 medical payments per person
- $10,000 uninsured motorist bodily injury liability per person
- $20,000 uninsured motorist bodily injury liability per accident
This program does not offer collision or comprehensive coverage, but such coverage can be purchased elsewhere.
New Jersey’s Special Automobile Insurance Policy (SAIP)
New Jersey’s low income car insurance program is for medical coverage only. You must be currently enrolled in Federal Medicaid with Hospitalization and have a current valid driver’s license (not revoked or suspended) to qualify.
The Special Automobile Insurance Policy (SAIP) covers your emergency treatment immediately following a car crash of up to $250,000. It also provides a $10,000 death benefit should the worst happen. However, SAIP does NOT provide you with liability auto insurance coverage, collision and comprehensive, or other medical costs that would be covered through Medicaid such as doctor visits.
A household of people enrolled in Medicaid who share one car can all be covered by the same policy. However, each car will need its own policy. Note that only individuals enrolled in a qualifying Medicaid plan can get a SAIP policy; other members of the household will have to find auto insurance elsewhere.
A special automobile insurance policy can be obtained at most insurance agencies. You can call the Personal Automobile Insurance Plan (PAIP) customer service number at 1-800-652-2471 or search for a PAIP producer online. As of 2018, your SAIP premium will be $360 per year if you pay upfront or $365 per year if you pay in two installments.
Hawaii’s Low-Cost Disability Auto Insurance Program
The state of Hawaii may provide car insurance to residents who get financial assistance as part of the state’s Assistance to the Aged, Blind and Disabled (AABD) program. This program provides cash benefits for food, clothing, shelter, and other essentials to qualifying residents of Hawaii. To qualify for AABD, you must be one of the following: 65 or older, legally blind, totally and permanently disabled, or living with and taking care of someone who receives AABD financial assistance. You must also have a countable income below 34 percent of the current Federal Poverty Level. Auto insurance under this program is free of charge.