Low-income car insurance

California, Hawaii, and New Jersey offer low-income car insurance coverage. These government-sponsored policies offer reduced benefits at a lower price to make the coverage affordable for low-income families.

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By 

Rachael Brennan

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

Published February 3, 2022 | 5 min read

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Car insurance can be expensive, but it is required in almost every state. Even for the most basic, liability-only policy, states like Florida and New Jersey have average car insurance rates of more than $1,000 per year. So how is someone living at or below the poverty line supposed to afford car insurance?

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Several states have created low income car insurance programs to help residents who can’t afford the required minimum levels of coverage. These state-sponsored car insurance programs may be available for drivers who’ve been unable to find affordable car insurance anywhere else.

Key takeaways

  • California, Hawaii, and New Jersey offer car insurance specifically designed for low-income residents.

  • Low-income car insurance allows people to drive legally and provides some protection in the event of an accident, but it offers lower levels of coverage than the state minimum requirements.

  • Drivers in New Jersey and Pennsylvania have access to CURE, a not-for-profit insurance company that rates you solely on your driving history.

What is low-income car insurance?

Low-income car insurance is a type of special program offered in three states, California, Hawaii, and New Jersey, designed to provide limited car insurance coverage for low-income drivers. These policies exist so that people living at or below poverty wages are able to afford some level of car insurance coverage. 

The policies allow low-income families to drive legally, and do provide some protection in the event of an accident, but they offer lower levels of coverage than the state minimum requirements.

Where is low-income car insurance available?

Almost every state in the country requires a minimum level of insurance coverage that drivers must purchase to protect themselves in an accident and make sure they are within the bounds of the law. No matter what their financial situation, drivers have to purchase the required state minimum levels of car insurance. This can often leave low-income families in a bind.

However, California, Hawaii, and New Jersey have insurance products specifically designed for low-income residents.

California low income car insurance

California’s Low Cost Auto Insurance program (CLCA) is designed to provide affordable insurance to low-income drivers who meet the financial requirements and have a clean driving record. [1] To qualify for the program, drivers must:

  • Have a valid California driver’s license

  • Meet financial guidelines

  • Own a car worth less than $25,000

  • Have a clean driving record

  • Be of legal driving age

The CLCA insurance program provides liability coverage at lower levels than the state’s minimum requirements, but it is legally allowed by the state in order to help reduce insurance costs for low income drivers.

→ Learn more about car insurance in California

Hawaii low income car insurance

Hawaii has a benefits program that is designed to help residents on Supplemental Security Income (SSI) who need additional financial assistance. [2] If you qualify, the state provides you with a no-fault insurance policy at no cost to you. That means it’s essentially state-sponsored free car insurance, but drivers must meet the following criteria to qualify:

  • You must be a resident of Hawaii. You do not live in a public institution.

  • You must be a U.S. citizen. If you are from a foreign country, then you must be a permanent resident.

  • Your income is less than the Department’s standard of assistance.

  • Your total assets do not exceed the Department’s standards.

→ Learn more about car insurance in Hawaii

New Jersey low income car insurance

The Special Automobile Insurance Policy (SAIP) is a New Jersey program designed to provide car insurance for low-income residents. [3] SAIP is only available to New Jersey residents who are currently enrolled in Federal Medicaid with hospitalization.

Insurance coverage through SAIP costs $365 per year and covers emergency treatment immediately following an accident and treatment of serious brain and spinal cord injuries up to a limit of $250,000. It also provides a $10,000 death benefit due to an accident. 

It does not cover anything that would normally be covered by your Medicaid policy and you cannot get coverage if your driver's license is revoked or suspended. This is similar to personal injury protection (PIP) coverage, but it has limits to what type of injuries and medical care are covered. PIP also offers coverage for lost wages and other expenses that are not covered by SAIP.

SAIP does not provide any kind of liability coverage, which means you will have no coverage for any damage you may cause to another person or their property.

→ Learn more about car insurance in New Jersey

Citizens United Reciprocal Exchange (CURE)

Some states don’t offer low-income car insurance but have other options that can help reduce insurance costs. For example, drivers in New Jersey and Pennsylvania have access to CURE, a not-for-profit insurance company that sets your rates based only on your driving history rather than on other factors like your ZIP code or your credit score. 

It isn’t solely for low-income families, but it can be extraordinarily helpful for people who need affordable car insurance.

If you have an excellent driving history but you live in a high-risk area or you have a low credit score, CURE can help you save a significant amount of money on your car insurance. However, if you have an accident or a moving violation on your record, CURE might not have the lowest available rates for you. 

→ Learn more about car insurance in Pennsylvania

Car insurance costs by state

The cost of insurance varies significantly from one state to another. The chart below shows the average annual cost of insurance by state for both full-coverage and liability-only policies:

StateAverage annual cost for full coverageAverage annual cost for liability only
Alabama$1,726$611
Alaska$1,345$433
Arizona$1,565$640
Arkansas$1,772$524
California$1,857$601
Colorado$1,751$544
Connecticut$1,790$949
Delaware$2,110$988
District of Columbia$1,796$678
Florida$2,914$1,253
Georgia$1,710$817
Hawaii$1,200$424
Idaho$1,109$400
Illinois$1,403$558
Indiana$1,219$453
Iowa$1,152$317
Kansas$1,604$493
Kentucky$2,158$931
Louisiana$2,906$993
Maine$1,147$448
Maryland$1,798$898
Massachusetts$1,614$612
Michigan$2,377$888
Minnesota$1,418$547
Mississippi$1,674$543
Missouri$1,568$564
Montana$1,888$497
Nebraska$1,735$424
Nevada$2,137$958
New Hampshire$1,224$462
New Jersey$2,259$1,154
New Mexico$1,480$459
New York$2,172$974
North Carolina$1,009$423
North Dakota$1,397$406
Ohio$1,038$386
Oklahoma$1,928$496
Oregon$1,461$769
Pennsylvania$1,605$501
Rhode Island$1,860$868
South Carolina$1,864$779
South Dakota$1,618$339
Tennessee$1,329$460
Texas$1,840$643
Utah$1,503$672
Vermont$1,124$380
Virginia$1,314$570
Washington$1,651$619
West Virginia$1,681$626
Wisconsin$1,062$348
Wyoming$1,398$321

→ Learn more about car insurance costs

Best ways to save money on car insurance

For drivers who don’t qualify for or have access to a low income car insurance policy, there are several ways to save money on car insurance, including:

  • Comparing quotes from multiple companies: It is possible to save hundreds of dollars a year by switching to a different insurance company, so shopping around and comparing quotes is the most effective way to save money on your car insurance.

  • Keeping your driving record clean: Avoiding accidents and moving violations is one of the best ways to keep your insurance rates low.

  • Choosing wisely: The type of car you drive, your ZIP code, and how much coverage you choose to purchase all have a big impact on your insurance costs as well, so do your research before buying a new car or moving to a new neighborhood so you know if those things will increase or decrease your rates.

Frequently asked questions

Are there discounts to help save money on car insurance?

There are several discounts that are commonly available from most insurance companies, including safe driver discounts, good student discounts, pay in full discounts, bundling discounts, and job related discounts.

Why doesn’t every state have a low income insurance program?

Each state gets to set their own laws and regulations regarding car insurance, which means states that don’t have a low income insurance program have chosen not to do so.

Does Medicaid or Medicare cover car insurance?

No, Medicaid and Medicare don’t cover car insurance. If you have Medicaid or Medicare and are injured in a car accident they will pay for medical expenses according to the limits of your policy, but they are not a substitute for car insurance coverage that is required by law, except in Michigan where you can choose to opt out of PIP coverage if you have Medicare.

Methodology

Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states, plus Washington, D.C. 

For full coverage policies, the following coverage limits were used:

  • Bodily injury liability: 50/100

  • Property damage liability: $50,000

  • Uninsured/underinsured motorist: 50/100

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

In some cases, additional coverages were added where required by the state or insurer.

Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers age 30, 35, and 45. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles per year.

Rates for driving violations and “poor” credit were determined using average rates for a single male 30-year-old driver with a credit score under 578.

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of insurance costs. Your actual quotes may differ.