If you’re struggling to make ends meet, you may be considering forgoing car insurance. But there’s a program that can help you drive legally in New Jersey at a low cost. 

If you are currently enrolled in federal Medicaid with hospitalization, you may be eligible for the Special Automobile Insurance Policy (SAIP) in New Jersey. Also known as dollar-a-day car insurance, this policy has very limited coverage that doesn’t meet the state minimum requirements for typical drivers, but it’s an option if you can’t afford traditional auto insurance

There are downsides to this program, and it’s not the best solution for everyone. The very limited coverage means you’ll be on the hook for damages caused to another driver in an accident. However, it is a way to drive legally in New Jersey. Keep reading to find more about the program, eligibility requirements, and actual costs. 

You may also be able to secure a low premium for a more robust policy that meets the state’s minimum requirements just by comparing personalized rates across insurers. With Insurify, you’ll only need to enter your information once, and you’ll get customized car insurance quotes from up to 20 insurance companies side by side. Our comparison tool makes it easy to ensure you get the lowest possible premium. 

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What is the dollar-a-day insurance program

The New Jersey dollar-a-day insurance program, or SAIP, is a program offered by the New Jersey Department of Banking and Insurance. The policies are written by National Continental Insurance Company

The SAIP is designed to prevent financially strained drivers from going without car insurance. For most drivers, the state requires liability coverage, personal injury protection, and uninsured motorist coverage. The dollar-a-day car insurance policy doesn’t include these protections, but it is a way for eligible drivers to hit the road legally while paying just $365 per year. 

Here’s a look at what’s covered and what you’ll be responsible for in the event of an accident.

Covered Not Covered
  • Emergency treatment for the policyholder in the event of an accident
  • Up to $250,000 in coverage for the treatment of the policyholder’s brain and spinal cord injuries
  • A $10,000 death benefit paid to your family if you die in a collision
  • Medical treatment beyond brain and spinal cord injuries (though your Medicaid benefits may cover you)
  • All injuries to the other driver and damages to the other driver’s property
  • Damage to your vehicle

The limited insurance coverage offered with the SAIP could leave you vulnerable to high costs in the event of an accident. That’s why you should make every effort to find an affordable policy that offers liability coverage before you resort to dollar-a-day insurance. With Insurify, you can compare customized rates for coverage that meets the state’s requirements, so you’ll be able to find the policy with the lowest premium for you in minutes. 

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Who is eligible for dollar-a-day

Not everyone is eligible for dollar-a-day car insurance. In order to qualify, you must:

  • Be a New Jersey resident.
  • Lack an existing auto insurance policy.
  • Be enrolled in the federal Medicaid program with hospitalization (not all Medicaid participants will qualify).
  • Have a driver’s license and registration (if your license has been revoked or suspended, you won’t qualify).

If you previously signed up for the SAIP but no longer qualify for Medicaid, your policy will stay valid until your next renewal. At that point, you’ll have to look into other coverage options. 

How do you apply for dollar-a-day?

To apply for the SAIP policy, locate a Personal Automobile Insurance Plan (PAIP) producer near you or call 1 (800) 652-2471. You’ll need to bring the following documents with you when you apply:

  • Driver’s licenses for all potential drivers to be insured under the policy
  • Your vehicle’s registration
  • Medicaid identification cards for all drivers to be insured under the policy

How much does dollar-a-day really cost?

Dollar-a-day insurance program costs just $365 per year if paid in two installments, or $360 if paid upfront. While the dollar-a-day policy is certainly a way to keep your insurance costs low, the lack of bodily injury coverage means you could face unaffordable costs if you have to cover the other driver’s injuries in a car accident

Things You Should Consider Before Signing Up

The SAIP is no replacement for the collision coverage offered with a standard policy. When deciding whether dollar-a-day is right for you, you should consider more than just the policy costs. You should also consider how you’ll manage to weather the financial repercussions of an accident without comprehensive coverage. Typically, low-income drivers who rely on Medicaid for medical coverage don’t have the funds to manage such an emergency. 

While your own outpatient treatments could be covered by Medicaid, treatment for injuries sustained by the other driver in the accident would be your responsibility, as would property damage costs. And your car could end up totaled, and you’d never see a cent from the insurance company

You should sign up for the SAIP only as a last resort. If you can get auto insurance coverage that meets the state’s minimum insurance requirements, you’ll be much better protected in the event of a collision. 

The Easiest Way to Get Cheap Car Insurance 

If you have a clean driving record, you might find that you can secure a low premium on a standard policy. You could save hundreds of dollars annually just by comparing personalized quotes from different insurance providers.

With Insurify, you can get customized cheap car insurance quotes from up to 20 providers in as little as two minutes. It’s absolutely the easiest way to save a huge chunk of change on your annual premium. 

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Updated July 23, 2020

Lindsay Frankel is a Denver-based personal finance writer for Insurify. Her work has been featured in publications such as LendingTree and FinanceBuzz. When she's not writing, you can find her enjoying the great outdoors with her rescue pup, playing music, or listening to audiobooks.