Drivers in all fifty of the United States are required to carry auto insurance in order to legally drive a car. But as you may know, insuring your car isn’t always cheap. Did you know that some households spend up to 30% of their monthly income on auto insurance alone?
If you’re struggling to pay for your auto insurance, you may be interested in government-sponsored car insurance for low-income families. In this guide, we’ll look at where this financial assistance is available, and how you can qualify for it.
Government-Sponsored Car Insurance for Low-Income Families
If you’re having financial trouble, even for a short period of time, you’re likely worried about how you’ll pay for your car insurance. After all, if you don’t have insurance you can’t drive to work. And if you can’t drive to work you can’t pay for your insurance, among other things.
If you live in Hawaii, New Jersey, or California, you may be eligible for assistance. These three states offer state-sponsored car insurance for those who meet certain criteria. Interested in learning more about low-income car insurance? Let’s look at the states’ programs individually.
State-Sponsored Car Insurance in California
California residents pay car insurance premiums that are approximately 20% higher than the national average. Cost of living as a whole is pricey in California, so it’s no surprise that many residents need assistance.
California’s Low-Cost Automobile Insurance program, or the CLCA insurance program, is a state-sponsored program designed to assist low-income drivers. To be eligible for the CLCA insurance program, you must meet certain requirements. You must:
- Have a valid CA license
- Have a car that’s valued at lower than $25,000
- Have a good driving record
- Meet household income requirements
The income requirements may vary from year to year, as they’re based on the national poverty level. At the time of writing, a family of three must earn less than $54,900 per year to qualify for CLCA insurance.
The CLCA insurance program may cost as low as $244 per year in premiums. Residents can pay in full or in seven installments, and the coverage meets all state minimum requirements.
State-Sponsored Car Insurance in Hawaii
If you live in Hawaii, you may be interested in government subsidies for your auto insurance. Here, however, it’s a little more complicated in the Aloha State. Qualified residents may actually be able to get car insurance for free. However, of course, there are stipulations.
The Hawaii low-income car insurance program is available to those who already qualify for benefits. The Department of Human Services will help guide you through the process of applying but note that most subsidized car insurance is through the Aged Blind and Disabled program.
Even with that in mind, you don’t have to qualify for Aged Blind and Disabled programs to have the cost of your car insurance covered. While the coverage can only be applied for through your social worker, the program is designed to help Hawaii residents get back to work.
State-Sponsored Car Insurance in New Jersey
If you live in New Jersey and you qualify for Medicaid, there’s a good chance you also qualify for low-cost car insurance. Government-sponsored car insurance is available to many Medicaid recipients, and all you must do is prove your Medicaid coverage at the time of your enrollment.
New Jersey’s program is called the Special Automobile Insurance Policy (SAIP), and it will cover $10,000 in death benefits and up to $250,000 in emergency medical treatments following an accident.
It’s important to note that SAIP is not liability insurance. However, if you qualify for SAIP you’re exempt from carrying the state minimum coverages. The New Jersey SAIP is also called the Dollar a Day insurance plan, as it costs just $365 per year. You can pay this in full and save five dollars or pay the $365 in two installments.
Again, to qualify for the New Jersey SAIP, you need only be eligible for certain Medicaid programs. Call your caseworker to determine whether your Medicaid plan qualifies you.
Summary: Low Income Car Insurance
There are three states in the country that allow low-income drivers access to affordable auto insurance. If you’ve been struggling to pay your car insurance bills, you’re not alone. But residents of New Jersey, Hawaii, and California may be eligible for low-cost or free government-sponsored auto insurance for low-income families. Check with your Social Services office to start paying less for your car insurance today.