How to get a special auto insurance policy for low-income drivers
Low-income individuals and families can take advantage of some state-sponsored and non-state-sponsored car insurance programs. While every program is unique, most have a series of eligibility requirements you must meet.
Low-income auto insurance programs can make it easier to find cost-effective coverage. However, there are some downsides to consider. For example, some programs only offer minimum-coverage policies, which may not offer enough protection for your needs.
Government insurance programs
A handful of states offer government insurance programs for low-income drivers.
“Currently, California, Hawaii, and New Jersey have state programs to help low-income drivers with their insurance bills,” says Nick Schrader, an insurance agent with Texas General Insurance. “However, there is no national, federal program to help low-income individuals pay for car insurance.”
California
California’s Low-Cost Auto (CLCA) Insurance is a state-funded program that provides more affordable coverage to eligible drivers. It only provides state minimum liability insurance for the vehicle’s primary driver and one additional driver. You can also add medical payments and uninsured/underinsured motorist insurance for an additional fee.
Here are the requirements for the CLCA program:
Have a valid California driver’s license
Meet the income requirements
Own a vehicle valued at less than $25,000
Be at least 16 years old
Have a good driving record or be a newly licensed driver
Hawaii
Hawaii’s Assistance to the Aged, Blind, and Disabled (AABD) program provides car insurance and other essential benefits to qualifying individuals. To learn more about what types of car insurance are available and how to secure coverage, reach out to Hawaii’s Department of Human Services.
To qualify, you must meet the following requirements:
Be a Hawaii resident
Have a valid Hawaii driver’s license
Must be older than 65 or meet the Social Security Administration (SSA) definition of disabled or blind
Meet the income requirements
New Jersey
New Jersey has two low-income car insurance programs.
The New Jersey Special Automobile Insurance Policy (SAIP) allows low-income New Jersey residents to secure medical payments coverage if they receive federal Medicaid with hospitalization benefits. Drivers who qualify for this policy can get a medical coverage-only policy for $365 per year, which is about $30 per month.
There’s also the Basic Policy, which only provides a small amount of personal injury protection (PIP) and property damage liability coverage. Drivers can also add bodily injury liability, collision, and comprehensive insurance for an added fee.
If you’re eligible, you can purchase both policies through New Jersey auto insurance companies.
Non-state-affiliated programs
If your state doesn’t offer a state-sponsored car insurance program, you might look into non-state-affiliated programs. These programs aim to help low-income drivers get car insurance if they can’t afford a traditional policy. To qualify for these programs, you generally must meet certain income requirements.
Maryland Auto
The Maryland Auto Insurance program provides guaranteed car insurance if you’ve been denied coverage or had your policy canceled in the past. To participate in the program, you must be a Maryland resident and have a valid Maryland driver’s license.
In addition to liability-only insurance, you can get collision, comprehensive, rental car, and towing coverage through the Maryland Auto program.
CURE
CURE (Citizens United Reciprocal Exchange) is a car insurance company that specializes in insuring low-income individuals, as well as high-risk drivers who may not be able to get approved for a traditional policy. CURE doesn’t use your education, occupation, or credit score to calculate your car insurance rates, so those factors won’t affect your premium.
CURE offers a variety of coverages, including liability-only insurance, uninsured/underinsured motorist coverage, personal injury protection (PIP), collision insurance, and comprehensive insurance, as well as 24/7 roadside assistance. But CURE only sells policies in New Jersey, Pennsylvania, and Michigan.
Type of employment
The type of job you have can affect your car insurance premium. If your job requires long-distance commutes, for example, you might pay a higher car insurance premium due to the increased risk of an accident or other claim.[10]
But your employment could also get you discounts on car insurance. For example, GEICO offers military and educator discounts to help people in those professions get lower rates.
Education
When you apply for a car insurance policy, you might see a question about your education on the application. In general, the more educated you are, the less you’ll pay for car insurance. Based on Insurify’s analysis of recent rate data, drivers who only completed high school pay the highest average rates, whereas drivers with a doctorate pay the lowest rates.
In the table below, you can see the average cost of full-coverage car insurance based on education level:
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Credit score
In most states, insurance companies can check your credit when you apply for car insurance.[7] Drivers with poor credit are more likely to file insurance claims, so they often face higher rates for coverage.[11] Excellent credit can help you get the most affordable premium for your situation.
To help you gauge the cost of car insurance based on credit score, Insurify collected average full-coverage premiums for drivers with excellent credit, good credit, and poor credit.
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Homeownership
If you own a home, buying your homeowners and auto insurance policies from the same insurance company could help you save money. Many insurers offer “bundling discounts” to drivers who also insure their homes with the company. But keep in mind not all car insurance companies also sell homeowners insurance.