Dollar-A-Day Car Insurance In New Jersey 2024: What You Need To Know

It would be nice if everything cost a dollar, including car insurance. Well, for New Jersey residents this is a reality, at least for some. Dollar-a-Day auto insurance provides some of its 10.9% of uninsured residents with affordable auto insurance.

That is great, but what if one doesn’t live in New Jersey? For the rest of us, we look for auto insurance that will meet our needs and not break the bank. As an insurance representative of nine years, my job is to deliver information that will help you make an informed decision.

This actual form of auto insurance, while economical, is limited. It does not meet the minimum requirements for auto insurance in New Jersey. It is simple to obtain, however, due to its Medicaid aspect, you must meet income requirements. There are also driving record stipulations.

Other states may have individual programs that aid drivers with car insurance for short-term needs. Eight states have a program through Metromile that does not charge you per day, but per month. More on this in a moment.

Affordable Auto Insurance Options

For those who are lucky to live in New Jersey, you have the benefit of Dollar-a-Day insurance. However, this policy is a Special Auto Insurance Policy (SAIP) and does not meet minimum insurance requirements, It also will not cover Bodily Injury (BI), Property Damage (PD), or Collision. It is designed to help you medically by providing emergency medical care.

Other plans would be better suited should you desire better coverage. These options include:

• Temporary Car Insurance – Temporary car insurance is insurance that is less than a standard six- or twelve-month policy. This can be a one-day policy up to a three-month auto insurance policy. Most are difficult to find and can be expensive when you do.
• Government Car Insurance Programs For Low-Income Individuals– This is similar to what we’ve discussed with SAIP. Most would be government-controlled, and you would need to meet certain stipulations to qualify.
• Low-Income Car Insurance – These auto insurance policies would not be government-controlled, but usually, the car insurance provider themselves discounts these policies based on income levels.
• One-Day Insurance – These types of policies are not found with car insurance providers, but may be found with the credit card company you bank with, or the car rental location you do business with.

There are temporary auto insurance options available such as Hugo insurance. They offer short-term auto insurance in terms of three, seven, fourteen, and thirty days. While not Dollar-a-Day, they offer pay-per-day liability insurance policies.

Dollar-A-Day Insurance Vs One-Day Insurance

While there is no true one-day auto insurance, even Hugo’s policy minimum is three days, an insurance policy can be canceled at any time. In effect, you can purchase a six-month policy and then cancel it after one day of having it.

The same can be said of your dollar-a-day policy. Here is how the two types of insurance stack up against each other.

What Does Dollar-A-Day Insurance Cover?

The most important factor about Dollar-a-Day and most temporary auto insurance is that they are either designed for low-income drivers or to get you through a short time period between traditional auto insurance policies. Dollar-A-Day insurance is limited in its coverage.

A temporary insurance plan will have more coverage in that it will have as much coverage as you select for coverage. If you choose a Liability Only policy this is what this coverage would look like:

How Much Is Dollar-A-Day Insurance?

The cost for Dollar-a-Day insurance through a true dollar-a-day insurance company is $365 per year. This will cover only one car, if you own more than one vehicle, each will need its own policy.

If you choose a temporary auto insurance policy, your cost will depend on whether you select a Liability Only policy or Full Coverage. Of course, factors such as vehicle type and your personal info such as age and driving record will factor into your overall insurance cost.

How To Get Dollar-A-Day Insurance

For Dollar-A-Day insurance, otherwise known as Special Automobile Insurance Policy (SAIP), one must live in New Jersey and be enrolled in Medicaid with hospitalization to qualify. You must also be uninsured to qualify.

If at any point you lose your Medicaid, you are able to keep your Dollar-a-Day insurance through the remainder of your policy period, but you will be unable to renew. Your license must also be in good standing.

You can contact a local insurance agent or visit the New Jersey Department of Banking and Insurance website for details on applying.

If you are seeking temporary auto insurance you can find coverage by providing the vehicle’s information as well as your personal information such as age, location, and driving record for a quote.

Who Qualifies For Dollar-A-Day Insurance?

The first thing to understand is that for one to apply for Dollar-a-Day, one must own their vehicle. If you are under a lease, your finance company will most likely require you to have auto insurance. We will see how this will disqualify you from obtaining Dollar-a-Day insurance below.

Dollar-A-Day auto insurance has strict requirements. One must:

• Live in New Jersey – Dollar-a-Day insurance is not available in any other state.
• Be enrolled in Medicaid with hospitalization – No other Medicaid program type qualifies.
• Purchase either a six-month or one-year policy – Dollar-a-Day insurance cannot be purchased on a daily basis. You can’t buy it by the day or week.
• Be uninsured – If you are currently insured you do not qualify for Dollar-a-Day insurance. You can see why if you are financing a vehicle, you would not be able to obtain Dollar-a-Day insurance. All lease agreements require you to maintain auto insurance as part of the lease.
• A license must be in good standing – If your license is suspended or revoked you are not eligible.

Traditional auto insurance carriers have the same requirements about needing to purchase either a six-month or one-year policy, and the better standing your license is, the lower your premium will be. As an example, an Insurance dot com study shows that a DUI can easily increase one’s premium from between 28% to 371% depending on the state you live in.