Also referred to as the dollar-a-day car insurance plan, the Special Automobile Insurance Policy (SAIP) is a residual market government car insurance policy offered in New Jersey for drivers who have Medicaid with hospitalization benefits.
This may sound confusing, but the concept is simple: the state of New Jersey has created a very cheap car insurance policy that allows low-income drivers to have at least some car insurance coverage in the event of an accident. Dollar-a-day coverage allows drivers to get proof of insurance, even though the plan covers significantly less than the state mandatory minimum levels of coverage.
What does NJ dollar-a-day insurance cover?
Not much, unfortunately. Unlike standard auto insurance, dollar-a-day car insurance offers extremely limited coverage. A dollar-a-day insurance plan in New Jersey covers:
Emergency treatment immediately following an accident
Treatment of serious brain and spinal cord injuries up to $250,000
$10,000 death benefit if you are killed in a car accident
A dollar-a-day insurance plan offers no coverage for property damage or bodily injuries you cause to other people in a car accident, which you could be held liable for in court if you are at fault in an accident.
It also doesn’t cover most injuries that can happen after a car accident. While it seems like you are covered for a trip to the emergency room, once you are discharged, the coverage no longer pays for things like whiplash, concussions, broken bones, or other injuries that are commonly caused by a car accident.
Dollar-a-day car insurance also doesn’t cover damage to your own car, which is typically covered by comprehensive and collision coverage in a regular car insurance policy.
How to get dollar-a-day insurance in New Jersey
SAIP coverage is provided by the state of New Jersey, but you can work with a licensed insurance broker to buy a policy, or use the New Jersey state website to search for a Personal Auto Insurance Policy (PAIP) producer who can sell you an SAIP policy.
To buy an SAIP policy, you’ll need the following documents:
While SAIP coverage is provided by the state, you can purchase your policy at several insurance agencies across New Jersey. You can go online and see which agencies in your county can help you find SAIP coverage.
How much is dollar-a-day insurance?
True to its name, dollar-a-day insurance is $365 per year if you pay in two installments, averaging out to $1 per day, although paying for the entire year in advance means you’ll only pay $360 per year.
Keep in mind that dollar-a-day insurance only covers a single car. Households with more than one car would need to purchase an additional dollar-a-day policy to cover an additional vehicle.
Who qualifies for dollar-a-day car insurance?
Dollar-a-day car insurance is a special program intended only for drivers who might otherwise go completely uninsured.
Whether due to age, income level, or disability, about 18% of New Jersey residents qualify for Medicaid, so it is important for the state to offer a more affordable car insurance option for these drivers. But not every Medicaid program qualifies you for dollar-a-day coverage, you must be enrolled in Federal Medicaid with hospitalization.
If you’re not sure whether you qualify for dollar-a-day insurance, an insurance broker will be able to tell from your Medicaid ID number.
Dollar-a-day car insurance vs liability only coverage
Although a dollar-a-day policy does offer a limited amount of medical coverage for you if you are in an accident, it doesn’t do the one thing a basic car insurance policy is supposed to do — pay for damage you cause to other people and their property in an at-fault accident.
Liability coverage is the part of your insurance policy that pays for damage you cause in an accident. A car accident can cause tens (or even hundreds) of thousands of dollars in damages, so drivers who want to make sure they are financially protected in an at-fault accident should purchase as much liability coverage as they can afford.
Drivers who can’t afford much insurance should purchase at least the state minimum amount of coverage if possible. New Jersey has the following car insurance requirements for a basic policy:
Property damage liability coverage: $5,000
Personal injury protection: $15,000 per accident
Choosing the basic policy also comes with a limited right to sue someone else in a car accident. New Jersey also offers the option of a standard minimum coverage policy, which covers:
Bodily injury liability coverage per person: $25,000
Bodily injury liability coverage per accident: $50,000
Property damage liability coverage: $25,000
Personal injury protection: $15,000 per accident, plus up to $250,000 for severe injuries for a standard policy
Uninsured/underinsured motorist coverage: Optional, but must match liability limits if purchasing a standard policy.
Choosing the standard plan is more expensive than the dollar-a-day coverage, but it is still relatively cheap and provides significantly better coverage.
For example, using a sample driver who is a single, 30-year-old man with a clean driving record and a 2011 Chevy Equinox in Bloomfield, NJ, we got a quote from GEICO of $934 per year. That is $569 per year more than the dollar-a-day coverage, the equivalent of an extra $47 per month, for significantly more coverage than an SAIP.
Drivers who choose a basic policy could pay even less, though GEICO and some other car insurance companies don’t offer drivers the option to get an online quote for a policy with no bodily injury coverage. Drivers who are interested in purchasing a basic policy can work directly with an insurance expert to get a quote.