What auto insurance programs are there for low-income people? (2023)

Car insurance is very important irrespective of your income level. But if your budget is already stretched due to low income, you will findcheap car insuranceit can be an intimidating (but doable) challenge.

Minimum auto insurance requirements vary by state, but nearly all states require some level of coverage. Regardless of income, you will need a vehicle unless you live in an area with accessible public transport. This means that you also need affordable auto insurance.

It's not good to have to choose between paying car insurance or feeding your family. But this is a reality for many people in America today. If you've been through this situation, you're definitely not alone.

Here we cover everything you need to know to find affordable car insurance for a low income.

What is Low Income Car Insurance?

Low-income car insurance is exactly what it sounds like, affordable insurance for low-income individuals or families.

Cheap insurance can be obtained in two ways: through government-sponsored low-income auto insurance programs or by implementing simple strategies to lower your auto insurance costs.

Whether your state offers low-income auto insurance programs or you need to lower your insurance costs on standard auto insurance, we've got you covered.

States that offer low-income auto insurance

Currently, three states in the US offer statewide auto insurance for low-income residents. California, Hawaii and New Jersey introduced these programs for low-income individuals and families to make auto insurance a more affordable necessity.

How Do Low Income Auto Insurance Programs Work?

State-sponsored auto insurance programs for low-income individuals vary by state in terms of eligibility requirements and the scope they provide.

California low income car insurance

California Low Cost Auto Insurance Program (CLCA) is a government-sponsored program created in 1999 to provide affordable liability coverage for low-income drivers who meet certain eligibility requirements. Its goal is to make the state's minimum liability requirements accessible to everyone, thereby reducing the number of uninsured drivers on California's roads.

Low Income Car Insurance in Hawaii

Obwohl Teil von Hawaii Care for the Elderly, Blind, and Disabled (AABD) is designed to help provide low-income automobile insurance, specifically targeting eligible income individuals age 65 and older who meet the Social Security Administration's definition of disabled or blind. Individuals who meet these requirements can take out state-mandated liability insurance free of charge.

Low Income Car Insurance in New Jersey

New Jersey offers special auto insurance (SAIP) for drivers on Medicaid. This special program only covers emergency medical treatment for qualified injured drivers. It does not provide liability coverage and does not meet the state's minimum requirements for auto insurance.

Cheapest car insurance with minimum coverage by state

Most states do not have federally sponsored auto insurance programs for low-income individuals. And yet, there are low-income people across the country. If you are one of those people, Progressive and Geico are the best insurers to consider.

Both insurers regularly advertise their low rates, and the data supports these claims. Our expert analysis found that the state minimums for Progressive and Geico are $315 and $318, respectively.

Keep in mind that these policies only cover the essentials, including liability for personal injury and property. Your car is not insured under these policies, but this low-income car insurance meets legal requirements.

*Observation :

• Minimum Status: Lower limits of liability
• Priced at $358, USAA is in the top 10 cheapest companies, but it's only available to military personnel, veterans, and their immediate families.

The cheapest complete car insurance

If the minimum is too risky, or if you need full coverage from your lender, here are the cheapest options:

*Observation :

• Full coverage: 100/300/100 with Collision Damage Waiver, $500 deductible
• Priced at $1,111, USAA is in the top 10 cheapest companies, but it's only available to military personnel, veterans, and their immediate families.

Citizens United Mutual Exchange

OUnited Citizens Reciprocal Exchange (CURE)is available to residents of Pennsylvania and New Jersey. It is a non-profit organization founded in the 1980s.

This program provides insurance for those who may be struggling to find affordable auto insurance for low-income individuals. In particular, factors such as education, work, and home ownership, which would normally increase your rates, have no effect on this program. Instead, rates are based on driving history.

Maryland Auto Insurance Fund

Are you a Maryland resident having trouble finding low-income auto insurance? If so, this program might be able to help.

Maryland Auto is a not-for-profit organization for those who have been denied insurance or had their coverage canceled due to considerations such as low or no credit, serious accidents or speeding tickets. If you are a low-income resident of Maryland and struggling to maintain coverage, this program is worth checking out.

keep reading:What is the cheapest (and best) car insurance?

Why do some states offer low-income auto insurance and others don't?

You might be wondering why only three states in the US offer low-income auto insurance programs when people in the US are facing financial hardship due to their low income.

If yes, you are not alone.

As insurers determine their car insurance rates, one factor they don't include is income. This means that, all other factors being equal (such as age, driving experience, and coverage levels), a person earning $30,000 a year will pay the same on their auto insurance policy as someone earning $200,000.

Organizations such as the National Association of Insurance Commissioners (NAIK) and the Consumer Federation of America (CFA) Be aware of factors such as income that affect the affordability of insurance.research points to thisthat access to a car, and therefore car insurance, is critical to obtaining and keeping employment. Employment, and therefore access to it, is the lifeblood of personal financial health and the economic health of the state. The affordability of auto insurance affects everyone.

In 2017, the NAIC published theStudy on the affordability of private car insuranceled by the USA Federal Insurance Agency. This study uses an affordability index to rank the affordability of private auto insurance within each state zip code.

The results were impressive. Car insurance costs exceeded the affordability index in more than 9% of all US zip codes, affecting more than 18.6 million residents.

Do not lose hope. As consumer advocacy organizations and groups continue this type of research and illustrate the link between affordable insurance and employability, there may be hope that more states across the US will begin offering federally sponsored auto insurance programs to low-income individuals. income.

Car insurance for low-income seniors

If you're a Medicaid senior, you may be wondering, "Does Medicaid cover auto insurance?" The quick answer is no. While it can help with medical expenses related to an accident, Medicaid does not pay for auto insurance.

However, if you are on Medicaid, some states offer special programs or exclusion options for personal injury protection.

These options are state-specific. Research your state to determine if you are eligible for Medicaid-related low-income auto insurance benefits.

Even if you are not on Medicaid,Special discounts for seniors, such as a senior driver discount upon completion of an approved defensive driving course, may be available.

comprehensive insurance

Currently, 11 states in the US offer what is being calledample form of insurance: Colorado, Delaware, Idaho, Iowa, Maryland, Mississippi, Nebraska, Nevada, Ohio, Tennessee e Washington.

Broadband insurance is a minimum liability insurance for a named driver. This coverage is typically the cheapest option, but it often doesn't meet the government's minimum requirements. Make sure you meet your state's minimum auto insurance requirements before considering comprehensive insurance.

Low-income car insurance: Is affordable car insurance possible?

It's possible.

Don't be discouraged if you're on a tight budget and struggling to pay for your car insurance. There are many ways to ease this burden and lower your car insurance rates, whether or not you live in a state that offers low-income car insurance.

Remember that in times of financial stress, insurance is better than no insurance. However, reducing coverage to a minimum should only be a last resort after you have tried every other method to lower your car insurance costs.