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Government-Sponsored Car Insurance for Low-Income Families

On average, low-income households spend a disproportionately high percentage of their annual income on car insurance. Considering that car insurance is required in most states, it is a necessary expense.

As of this writing, California, New Jersey, and Hawaii have low-income auto insurance programs.

California's Low Cost Auto Insurance Program

Made part of California law in 1999, California's Low Cost Automobile Insurance Program (CLCA) is designed to provide liability car insurance at affordable rates to income-eligible drivers.

To qualify for the CLCA, you must:

  • Meet income eligibility requirements.
    • Income eligibility* depends on the number of people in your household and the combined income of all members of the household.
  • Have a good driving record.
  • Be at least 19 years old.
  • Have a current valid driver's license.
  • Own a car:
    • Valued at $20,000 or less.
    • With no unpaid loans.

Annual premiums vary from county to county but the highest premium is capped at $388.

Coverage limits provided by the CLCA are lower than the CA's standard minimum requirements for car insurance. However, drivers in the program are exempt from meeting those requirements.

CLCA coverage limits are as followed:

  • $10,000 for bodily injury or death per person.
  • $20,000 for total bodily injury or death when multiple people are hurt in an accident.
  • $3,000 for property damage.

* To check your eligibility and find out the premium rates in your county, visit the CLCA website.

New Jersey's Special Automobile Insurance Policy

The Special Automobile Insurance Policy (SAIP) is New Jersey's initiative to help provide car insurance to low-income drivers.

You can apply to SAIP through most insurance agents in New Jersey.

To be eligible for SAIP you must:

  • Currently be enrolled in Federal Medicaid with Hospitalization.
  • Have a current valid driver's license.

Your SAIP premium will be:

  • $360 per year if you pay up front.
  • $365 per year if you pay in two installments.

SAIP covers your emergency treatment immediately following a car crash, in addition to costs related to serious brain or spinal cord injuries up to $250,000.

SAIP does not provide you with liability auto insurance coverage, or other medical costs that would be covered through Medicaid.

If your Medicaid is canceled during coverage, you may keep your policy, however, you will not be able to renew a SAIP policy once your current policy has expired.

For more information about New Jersey's Special Automobile Insurance Policy, visit the New Jersey Department of Banking & Insurance website.

Hawaii's Low Cost Disability Auto Insurance Program

According to Hawaii state law, any driver or person unable to drive due to permanent disability who receives public assistance involving direct cash payments may receive free personal injury protection and liability insurance from the state.

For more information, contact the Hawaii Department of Commerce and Consumer Affairs.

Shopping Around for Car Insurance

Regardless of your state's low cost program, getting multiple quotes for car insurance, whether online or by phone, will help you find the best policy at the best price.

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