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If you’re struggling to make ends meet, you may have a lifeline if you qualify for specialized coverage known as low-income car insurance.
Low-income car insurance is state-sponsored coverage available to those who meet income eligibility requirements. The coverage levels may be at or below state-mandated car insurance minimums and do not provide collision or comprehensive coverage.
Knowing about government car insurance for low-income drivers, where it's available, and who qualifies can help you understand your options if you can’t afford auto insurance.
Which states offer low-income car insurance?
California, Hawaii, and New Jersey have state-sponsored low-income car insurance.
California’s Low Cost Auto Insurance
The low-income car insurance program in California provides insurance limits lower than the state-required minimum. It provides the following liability limits, plus optional uninsured motorists coverage and MedPay:
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Up to $10,000 per person for bodily injury or death
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Up to $20,000 per accident for bodily injury or death
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Up to $3,000 for property damage
To purchase low-income auto insurance in California, you must:
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Have an annual income of $39,125 or less in single-person households or $52,875 or less in two-person households. You can see income requirements for larger households at the California Low Cost Auto Insurance website.
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Hold a valid California driver's license.
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Own a vehicle worth $25,000 or less.
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Have a good driving record or be a new driver.
Hawaii’s free no-fault auto insurance
Hawaii provides eligible residents with free no-fault auto insurance. This coverage pays for your injuries from a car crash, up to the policy limits. You can qualify for Hawaii’s car insurance for low-income residents if you:
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Currently receive public assistance payments with direct cash benefits, supplemental security income benefits from the Social Security Administration, or public assistance benefits in the form of medical services that started before July 1, 1994
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Hold a valid driver's license or are unlicensed, permanently disabled, and unable to drive your own vehicle
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Are the sole registered owner of the insured vehicle
New Jersey’s Special Auto Insurance Policy
New Jersey's Special Auto Insurance Policy provides up to $250,000 of medical coverage after an accident for the treatment of serious spinal cord and brain injuries. It can also provide a $10,000 death benefit. The cost is $365 a year, payable in one or two installments.
To qualify, you must be enrolled in federal Medicaid with hospitalization.
Is there low-income car insurance for seniors?
Seniors can qualify for the above low-income car insurance programs based on income rather than age. If you don’t have access to a low-income auto insurance program, ask your insurance agent for ways to lower your car insurance bill.
State minimum car insurance requirements
If your state doesn’t offer a low-income car insurance program, you can get the minimum amount of coverage required in order to drive legally, but there are risks involved with minimum coverage.
Minimum auto insurance requirements vary by state but may include the following:
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Most states mandate only auto liability coverage. If you cause an accident, your liability insurance pays for the injuries and property damage you cause to others.
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No-fault insurance states also require personal injury protection (PIP), which pays for medical bills and more for you and your passengers after an accident, regardless of fault, up to the PIP limit.
Learn more: Minimum car insurance requirements in all 50 U.S. states
State minimum liability coverage levels are often too low to cover all the bills for serious accidents. If accident-related costs exceed your insurance limits, you are still liable for the remainder.
Expert tip: If you limit your auto insurance to the minimum liability coverage required by your state, you're leaving yourself without collision insurance and comprehensive insurance. You would have no insurance for repairing your own vehicle if you cause an accident or if your car is stolen.
Alternatives to low-income car insurance
If you don't have a low-income program in your state or you don't qualify, there are other ways to secure cheaper car insurance.
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Shop around for coverage. Car insurance companies use proprietary formulas to set their pricing. Rates for the same coverage can vary by hundreds of dollars per year from different insurers. Gathering quotes from five or more insurers can help you pinpoint cheap auto insurance options.
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Pay per mile insurance. If you don't drive much, you may be able to save money with a pay-per-mile insurance plan. Pay-per-mile insurance programs typically charge a low base rate plus a per-mile rate. Examples include Allstate’s Milewise and Nationwide’s SmartMiles.
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Ask for discounts. Ask your car insurance agent about getting new car insurance discounts. For example, if you go paperless for policies and bills, you may get a small discount. Some states mandate car insurance discounts for drivers age 55 and older who take a driver safety course, including Florida, Pennsylvania, and Virginia.
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Raise your deductible. If you have comprehensive and collision insurance, a higher deductible will result in lower premiums, but it's not always worth it. Raising your deductible usually only makes sense if you would be able to pay that amount toward repairs if you have a claim.
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Consider other assistance programs. Support in other areas of your budget may allow you to afford the minimum auto insurance to stay legal on the road. For example, your state may offer other types of assistance, such as food stamps, help with health insurance, or housing costs.
