How To Get Low-Income Car Insurance In 2024

11.6% of Americans are living at or below the poverty line. For many of these individuals, a vehicle is a necessity for survival, including providing transportation to and from work. Since most states require a minimum level of insurance, this leaves low-income drivers in a precarious situation.

In my decades-long career, I have witnessed countless customers who are forced to choose between paying their car insurance or paying another necessary bill. In fact, 28 million drivers in the U.S. are driving uninsured. Fortunately, individuals looking for low-income car insurance have some options.

This article provides some insight into the low-income car insurance market, what they entail, and where these policies can be purchased.

Should You Get Low-Income Car Insurance

Although many consumers are looking for ways to lower their car insurance premiums, not everyone is eligible for low-income car insurance. First, you must meet certain requirements as set by the state in which you reside. Additionally, the coverage provided is minimal and some only provide the state minimum limits of liability.

As such, low-income car insurance programs are not for drivers who lease or finance their vehicles. Since financial institutions generally require coverage to protect the car itself, liability coverage on its own will not suffice. However, customers who own their vehicles and meet all other state requirements can benefit from low-income car insurance programs.

Which States Have Low-Income Car Insurance Programs

Currently, only three states offer low-income insurance through the government. These states are California, New Jersey, and Hawaii. Each of these programs is outlined below.

California

The state of California offers low-income drivers more affordable car insurance through California’s Low-Cost Auto Insurance Program or CLCA. To be eligible for this program, consumers must meet the following requirements:

• Have a valid CA driver’s license
• Own a vehicle that is valued at $25,000 or less
• Meet income eligibility guidelines
• Be at least 16 years old
• Have a good driving record

Coverage is restricted to bodily injury at $10,000 per person, $20,000 per accident, and $3,000 per accident for property damage. Medical payments and uninsured motorist coverage can be added for an additional charge. There is no comprehensive or collision coverage offered.

The price of a policy through the CLCA will still vary depending on the garaging location of the vehicle and a customer’s driving record. But consumers can expect to pay between $232-$932 annually. Considering the average annual premium in California is $636 for liability only, the CLCA program can provide significant savings to eligible drivers.

New Jersey

The Special Automobile Insurance Policy (SAIP) is a program offered to New Jersey drivers who are eligible for Federal Medicaid with hospitalization. SAIP provides coverage for emergency treatment following a car accident up to $250,0000 and a $10,000 death benefit for $365 a year. It does not provide the state minimum liability coverage required for all drivers.

To obtain the state-mandated coverages, low-income drivers in New Jersey must also purchase a Basic Policy, which provides $15,000 in Personal Injury Protection (PIP), and $5,000 in property damage. Drivers can also opt for $10,000 bodily injury coverage, and comprehensive and collision coverage at an extra cost. This basic policy is available to all drivers, but the State of New Jersey Department of Banking and Justice recommends those with few family responsibilities and few assets purchase this plan since coverage is minimal.

Hawaii

Hawaii’s Department of Human Services offers an Assistance to the Aged, Blind, and Disabled (AABD) program that provides free car insurance to eligible drivers. To qualify for this program, you must meet the following requirements:

• Be a Hawaii resident
• Be 65 years or older OR individuals who meet the Social Security Administration definition of disabled or blind
• Have countable income below 34% of the 2006 Federal Poverty Level
• Resources not exceeding $2,000 for a single person and $3,000 for a couple

Non-State-Affiliated Low-Income Car Insurance Programs to Know

There are also some non-state-affiliated low-income car insurance programs that are good to keep on your radar. Notably, the Maryland Auto Insurance Program and the Citizens United Reciprocal Exchange.

Maryland Auto Insurance Program

The Maryland Auto Insurance Fund is a program that offers car insurance to drivers who are unable to obtain it in the standard market. To be eligible, drivers must meet the following requirements:

• Must live in Maryland
• Have a valid driver’s license
• Been previously rejected by at least 2 private insurers or had car insurance canceled or non-renewed for any reason, other than non-payment of premium

This program offers liability, collision, comprehensive, and rental car coverage options.

Citizens United Reciprocal Exchange

The Citizens United Reciprocal Exchange (CURE) is a low-income car insurance program offered to drivers in New Jersey, Pennsylvania, and Michigan.  This program offers bodily injury, property damage, comprehensive, collision, and personal injury protection coverage, along with some other add-ons such as roadside assistance and rental car reimbursement.

CURE’s program is best suited for those with lower or no credit scores since they do not use credit, occupation, or education level in their pricing.

What Discounts Are Available to Low-Income Drivers

If you do not qualify for a low-income car insurance program, or your state does not offer one, there are some discounts you may be eligible for to keep your costs low. Some of these discounts and their qualifications are listed below:

• Good Driver Discount – One of the best ways to keep your premium low is by maintaining a good driving record. This means that you should attempt to be free of any accidents or violations for at least 3 years. Drivers with clean records can save anywhere from 10%-30% on their car insurance.
• Safety Features Discount – The safer your vehicle is to drive, the more money you can save on your car insurance. When determining your next vehicle to purchase, try to look for cars that have safety features such as daytime running lights, anti-lock brakes, and airbags.

• Low Mileage Discount – The less you drive, the less likely you are to get into an accident. As such, insurers will offer discounts to drivers with low mileage. Typically this means driving fewer than 10,000 miles a year.

• Good Student Discount – If you have a student insured on your policy, a good student discount is a good way to save money. A student can typically qualify if they are under 25 years old and have a cumulative average of 3.0 or better.
• Multiple Policy Discount – On average, customers save 8% on their insurance by bundling their auto policy with their home, renters, or condo insurance. This is a good way to not only save money but also to simplify the insurance process by working with one company.

How to Reduce Your Premiums if No Government State Programs Exist

With no government state programs, drivers can reduce their car insurance premiums by utilizing a few different methods.

Shop Around

The best way to lower your car insurance premium, and maybe the most obvious, is to shop around. Insurance companies charge different rates and what you pay with one company may be higher than what you will pay with another. Utilize a quote comparison site or an independent agent to get quotes from multiple companies to find the best-priced policy.

Note: Be sure you are quoting the coverages you have on your current policy to get a more accurate comparison. Your current policy declarations page will have all the information you need to get a comparable quote.

Enroll in Telematics

Many companies are beginning to offer usage and behavior-based policies to their customers, utilizing telematics.  These programs use a device installed in your car or a mobile app to look at your driving behaviors such as braking, speed, acceleration and distracted driving to determine what you pay. If you are a good driver on a budget, these policies are a good way to save money.

Review Coverage

It is recommended to review your coverage every year as circumstances change. For example, you may want to reduce your policy from full coverage to liability only if you have paid off your car, or if your car is no longer worth carrying comprehensive and collision coverage. Another option would be to look at increasing your deductibles.

A recent Forbes Advisor analysis shows that drivers can save between 7%-28% per year on average by increasing their deductibles. The amount of the decrease depends on the company and the deductible itself. But this is a great option for those who can afford the additional out-of-pocket expense in an accident.

Note: Kelley Blue Book is a good resource to determine what your car is worth and help you decide on whether to remove comprehensive and collision.

Improve Your Credit

Many insurance companies will look at your credit score to determine the price of your car insurance. Studies show that lower credit scores can impact rates by as much as 72%. So depending on your state, improving your credit can make a substantial difference in what you pay for your insurance.

Avoid Lapses in Coverage

Insurance companies will also look at prior lapses in insurance to determine the price of car insurance. Drivers can expect to pay 9% more for their future car insurance after a lapse of 30 days, and a 48% increase after a lapse between 30-60 days. Continuously carrying insurance will help to keep your future car insurance costs low.

How Much Does Low-Income Car Insurance Cost?

The price of car insurance for low-income individuals depends on a few different factors. Specifically, your location, the company you choose, coverages, prior insurance history, driving record, etc. Here is a breakdown of low-income car insurance by state and company.

Per State

Per Company

What Factors Impact Your Rates

Various factors go into determining your auto insurance rates. The most common factors are as follows:

• Garaging Location
• Year, Make, Model of Vehicle
• Prior Insurance History
• Driving Experience
• Age of Drivers
• Coverage Chosen
• Deductible Amounts
• Annual Mileage
• Credit History

How to Find Low-Income Car Insurance

Finding affordable car insurance may seem overwhelming, especially if you’re on a tight budget. But it’s not impossible. Here are some of the ways you can find low-income car insurance.

• Conduct Research –  Research the eligibility requirements and how to start a policy if you live in one of the states that offer car insurance programs for low-income individuals. If you don’t qualify or don’t live in a state where specific programs are available, quote various insurance companies to find the most affordable for you.
• Work With Insurance Agents – Working with a local independent agent can be incredibly beneficial, and at no cost to you. They have extensive knowledge of the companies they represent and can help you choose one you may be able to afford. The best part is that they often review your policies before renewal and proactively shop around to find you the best price if the rates increase.
• Chat With Current Carrier – It’s always worth chatting with your current insurance company to see what they can do for you. While they cannot price-match, they may be able to suggest different converge or discounts to reduce your price. Some companies even offer loyalty discounts for customers who stay insured with them for a certain amount of time.