Cheap Car Insurance for Low-Income Drivers in New Jersey

What is low-income car insurance in New Jersey?

New Jersey offers a low-cost Basic car insurance policy that provides less financial protection than a Standard New Jersey auto policy. State law requires insurers to offer this low-cost coverage option to all drivers who want it.

Because New Jersey car insurance costs are typically high, the state also offers a second type of low-income car insurance called the Special Automobile Insurance Policy. It’s available only to qualifying Medicaid recipients.^[1] While an SAIP costs just $365 annually, and allows you to drive legally, it doesn’t provide any liability protection.

Because both low-income options leave significant financial protection gaps, it’s a good idea for New Jersey drivers to exhaust other options before turning to a Basic policy or SAIP.

New Jersey drivers on a tight budget can lower their costs and find affordable car insurance by choosing less coverage, comparing policies from multiple insurers, maintaining a clean record, and qualifying for as many discounts as possible.

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Cheapest car insurance in New Jersey

NJM offers New Jersey’s cheapest liability insurance, averaging $119 per month. By comparison, liability coverage statewide averages $182 per month.

New Jersey’s average cost of liability coverage is higher than the national liability average of $98 per month. Dense traffic, long commute times, required personal injury protection, and higher accident risks contribute to these costs. For example, road congestion means the state’s average commute time to work is nearly 31 minutes.^[2]

Drivers in Newark, Jersey City, and communities along the New Jersey Turnpike typically face greater traffic exposure than drivers in rural Sussex or Salem County. New Jersey regulators confirm that moving to a different rating territory can change premiums.^[3]

Here you can see how available rates from different insurers compare in New Jersey.

The below rates in New Jersey are estimated rates current as of: Monday, August 10 at 5:00 PM PDT. 

Insurance Company	Average Quote: Liability Only
NJM	$119
Plymouth Rock	$132
CSAA	$137
Allstate	$170
Direct Auto	$173
Bristol West	$180
Progressive	$180
Mercury	$219
GEICO	$221
Liberty Mutual	$263
State Farm	$278
Travelers	$359

Disclaimer: Table data sourced from real-time New Jersey car insurance quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual car insurance quotes in New Jersey may vary based on the policy buyer's unique driver profile.

Cheapest car insurance for drivers with poor credit in New Jersey

New Jersey law allows insurers to use credit-based insurance scores to estimate how likely high-risk drivers are to file a claim. This generally means people with poor credit will pay higher rates for car insurance.

That said, insurers in New Jersey can’t use a credit-based insurance score to deny, cancel, or non-renew coverage. They also can’t use insurance scoring for basic policies or coverage through the Special Automobile Insurance Policy.^[3]

Below, you can see which insurers offer the most affordable rates for drivers with poor credit.

The below rates in New Jersey are estimated rates current as of: Monday, August 10 at 5:00 PM PDT. 

Insurance Company	Average Liability Quote: Poor Credit
NJM	$137
Plymouth Rock	$153
CSAA	$163
Allstate	$195
Direct Auto	$205
Progressive	$207
Bristol West	$214
Mercury	$256
GEICO	$262
Liberty Mutual	$301
State Farm	$389
Travelers	$405

Disclaimer: Table data sourced from real-time New Jersey car insurance quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual car insurance quotes in New Jersey may vary based on the policy buyer's unique driver profile.

Special Automobile Insurance Policy in New Jersey

New Jersey’s Special Automobile Insurance Policy (SAIP), commonly called “dollar-a-day” insurance, provides limited medical coverage to residents enrolled in federal Medicaid with hospitalization benefits. Not every Medicaid plan qualifies. An insurance producer can determine eligibility using the applicant’s Medicaid identification number.

The policy costs $360 when paid in full or $365 when paid in two installments. It covers emergency treatment immediately after a crash, as well as up to $250,000 for serious brain and spinal cord injuries, and a $10,000 death benefit.

SAIP doesn’t include bodily injury or property damage liability, collision, comprehensive, or routine outpatient treatment. Consequently, it won’t pay if the policyholder damages another vehicle on the New Jersey Turnpike or if flooding damages the policyholder’s car.

Qualified drivers can purchase SAIP through most New Jersey insurance agencies. National Specialty Insurance Company writes the policies, and applicants can also locate an agent through the state’s Personal Automobile Insurance Plan (PAIP), many major insurers, or by calling 1 (800) 652-2471. An insurance producer must document your Medicaid eligibility when you purchase or renew a policy.^[1]

Other insurers to consider when looking for cheap auto insurance include USAA, Travelers, and Allstate.

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Minimum car insurance requirements in New Jersey

New Jersey is a no-fault state for car insurance. State  law requires standard policies issued or renewed Jan. 1, 2026, and beyond to include:

• Bodily injury liability: Pays for injuries and damage suffered by the other parties in an accident you cause

• Property damage liability: Pays for damage you cause to another person’s vehicle or property

• Personal injury protection (PIP): Pays medical expenses for you and covered household members, regardless of fault

• Uninsured/underinsured motorist coverage (UM/UIM): Protects you when an at-fault driver has no insurance or insufficient coverage

New Jersey’s Basic Policy provides $5,000 in property damage liability and $15,000 in PIP. Bodily injury liability is optional and capped at $10,000 per accident.^[4] That can leave a driver personally responsible if, for example, they cause a multi-vehicle accident on the Garden State Parkway.

Here, you can see the minimum car insurance requirements in New Jersey and what they cover.^[5]

Coverage	Minimum Standard Policy Requirement	What It Covers
Bodily injury liability	$35,000 per person/$70,000 per accident	Injuries or deaths caused to others
Property damage liability	$25,000 per accident	Damage caused to another person’s vehicle or property
Personal injury protection (PIP)	$15,000 per person, per accident	Medical expenses for the policyholder and covered people
Uninsured/underinsured motorist (UM/UIM)	$35,000/$70,000 bodily injury and $25,000 property damage	Losses caused by uninsured or underinsured drivers

What affects car insurance rates in New Jersey?

Several in-state risks affect New Jersey car insurance rates, including:

• Traffic density: Vehicles in New Jersey traveled a combined 217 million-plus miles per day in 2024. Congestion along the New Jersey Turnpike, Garden State Parkway, Route 3, and Interstate 80 increases vehicle interaction and accident exposure.^[6]

• Coastal storms and flooding: Nor’easters, hurricanes, heavy rain, and tidal flooding can damage vehicles, particularly along the Jersey Shore and in low-lying communities near the Hackensack, Passaic, and Raritan rivers. NJDEP reports that approximately 73% of New Jersey’s federal flood insurance claims originate in the state’s coastal zone, which also receives about 81% of the program’s claim payments in New Jersey.^[7]

• Vehicle theft: New Jersey recorded 14,755 vehicle thefts in 2024, down from 16,694 in 2023. Theft losses can affect comprehensive rates, though installing an anti-theft device — especially in areas connected to the New York-New Jersey transportation and shipping network — can help.^[8]

• Uninsured drivers: The Insurance Research Council estimated that 14.1% of New Jersey motorists didn’t have insurance in 2023. That’s higher than the organization’s previous estimate of 10.9% for 2022. New Jersey was among the states with the largest increases in uninsured motorists between 2017 and 2023. Uninsured drivers can shift accident costs to insured motorists and their insurers.

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