If you’re struggling to pay car insurance premiums, you may be disappointed to hear that car insurance coverage assistance is almost unheard of.
Although it’s not common, there are a few states that offer assistance to those on a low income who need car insurance. We’ll note which states can help and provide details about each program. But if you don’t live where there is state-subsidized auto insurance or if you do but don’t qualify for the low-income coverage, you may still be able to afford coverage.
We’ll also share some of the many ways you can lower the cost of your vehicle insurance by taking a few simple steps.
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California’s Low-Cost Auto Insurance
Even though you’ll see other states on this list of places with car insurance programs for those with low incomes, California is the only one that truly fits the classification of low-income car insurance. It’s called California’s Low Cost Auto Insurance (CLCA).
With the cost of living on the rise in California, you may be able to get car insurance and manage your budget, thanks to CLCA.
CLCA Qualifications
To qualify, you have to make less than 250% of the federal poverty level, and your car has to be worth less than $25,000.
This program has been in force since 1999, but in 2015, the state removed the qualification that you have to have three years of verifiable driving experience because too many people were not driving with insurance because their lack of experience disqualified them for the program and they couldn’t afford standard rates.
CLCA Cost
Each county sets a base rate. As you would expect, counties with a higher cost of living have a higher base rate than counties with a lower cost of living. The average base pay is around $225 annually.
Keep in mind that your base rate will likely change if you move counties. Los Angeles County will probably have a higher base rate than a county with a lower cost of living.
CLCA Coverage Limits
CLCA only provides liability coverage. It won’t cover the damage to your vehicle or person following a crash you are at fault for.
Unfortunately, the level of coverage provided is below what the state requires for standard insurance plans. And even the traditional plans are too low for adequate protection.
CLCA plans provide $10,000 of bodily injury liability per person with a max of $20,000 bodily injury liability for multiple persons per accident. It also provides $3,000 of property damage liability coverage.
Having any insurance is better than having none, and enrolling in this program will satisfy the requirements of California state law. Still, the low limits should make you consider adding uninsured and underinsured motorist protection, which you can do with CLCA.
That way, if someone else with CLCA causes a wreck with you and that destroys your car, your underinsured coverage will make up the difference between the $3,000 CLCA property damage limit and what your vehicle is worth.
Hawaii’s Assistance to the Aged, Blind, and Disabled
Hawaii has a car insurance program for a small group of individuals through its Assistance to the Aged, Blind, and Disabled (AABD) Program. AABD is a federal program that works jointly with individual states. Even though there’s an AABD program in each state, Hawaii is the only one that includes car insurance coverage.
Hawaii’s AABD program works with Supplemental Nutrition Assistance Program (SNAP) to cover car insurance for eligible individuals.
AABD Qualifications
To qualify for the AABD program, you have to meet the following qualifications:
- Social Security Administration’s criteria for being blind or disabled or being 65 or older
- Income at 34% of the 2006 federal poverty level
- Resources not exceeding $2,000 for a single person and $3,000 for a couple
Most individuals who receive AABD don’t receive Social Security benefits because those often exceed the income limits. It’s only a tiny percentage of citizens who qualify.
The insurance is free to eligible individuals.
AABD Coverage Limits
Hawaii’s low-income car insurance program provides no-fault car insurance for free. But what is no-fault insurance?
No-fault insurance is medical coverage for injuries sustained in a car accident regardless of who is at fault. If an eligible individual needs medical care following an accident, the AABD will cover that care up to the policy’s limits.
New Jersey’s Special Automobile Insurance Policy
The Special Automobile Insurance Policy (SAIP) is New Jersey’s low-income car insurance program. To be eligible for SAIP, you have to be enrolled in the federal Medicaid with hospitalization program.
SAIP Cost
The SAIP program is also often referred to as “dollar-a-day” car insurance because it costs a dollar a day. If you pay upfront for the year, you’ll save $5 and only have to pay $360. Otherwise, you’ll have to pay two annual installments equalling $365.
SAIP Coverage Limits
Like Hawaii’s AABD program, it only covers the enrollee’s injuries. It does not provide liability coverage to other persons or property, and it doesn’t offer coverage for the enrollee’s vehicle.
While it doesn’t provide outpatient treatments, it does offer the following benefits:
- Death benefit of $10,000
- Emergency treatment immediately following an accident and
- Severe brain and spinal cord injuries up to $250,000
Even though this program doesn’t meet New Jersey’s state minimum car insurance requirements for the general public, if you use this program for your insurance, you satisfy the state’s insurance requirements for your situation.
Saving Money if You Don’t Qualify for a Special Program
There are no low-income car insurance programs outside the three states mentioned above. And of those three, only California offers anything close to an adequate car insurance program.
The good news is that there are many ways to save on insurance using standard insurance companies.
Opt for State Minimum Requirement Limits
This isn’t a good idea because state minimum requirements are inadequate for financial protection, but it may be your cheapest option and will be better than nothing.
You might be surprised to learn that some car insurers are so serious about making sure their customers have adequate insurance that they either don’t offer state minimum coverage or charge more for it than a higher liability limit policy. So be sure to review options with different coverage levels.
Consider Alternative Transportation
If public transportation and rideshare services are an option for you, it may be time to consider giving up driving. Paying per trip scares many people away from this option, but before you make your decision, add up your cost of car ownership and compare it to how much an unlimited monthly public transportation pass would cost.
Look Into By-the-Mile Car Insurance
Pay-as-you-drive car insurance options are becoming more and more popular. A few companies specialize in by-the-mile coverage, and many standard insurance companies have by-the-mile programs.
Find Applicable Discounts
It’s possible that you’re not getting discounts you’re eligible for. Review the available discounts with your insurance agents and add any that apply to your situation.
While it’s frustrating to feel like you can’t afford insurance, you can’t afford to not have insurance. If you cause a crash, you’ll be held liable, and without insurance, you’ll face fines and the responsibility to pay for damages.
Even though there’s no program available to most low-income people, there are other ways to save. If you take advantage of them, you could lower your insurance bill by 35% or more.
Melanie Musson writes and researches for the auto insurance comparison site, AutoInsurance.org. She’s passionate about helping others understand their insurance needs and save money finding the best policy for their needs.
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