Car Insurance Programs for Low-Income Drivers

Government-sponsored car insurance is available to qualified drivers in certain states.

Alex GlennOct 18, 2016
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Car insurance is legally required for most drivers, but it comes at a cost not everyone can afford. The average consumer pays about $841 per year for auto insurance, according to the National Association of Insurance Commissioners.

Whether due to high car insurance rates or other reasons, roughly 1 out of 8 motorists nationwide chooses to drive uninsured, according to the NAIC. However, these drivers risk fines if caught and would be personally responsible for injuries and vehicle repair costs if they should cause an accident.

While alternative options for low-income drivers are slim, a few states offer government-sponsored car insurance programs to help prevent people from hitting the road uninsured. These programs typically offer limited car insurance coverage at greatly discounted rates, so qualifying motorists can drive legally.

States that offer low-income auto insurance


Through the California Low-Cost Auto Insurance program, Golden State residents can buy the minimum liability insurance needed to drive legally. Two optional coverages are also available: uninsured motorist bodily injury protection and medical payments coverage. Policies obtained through the program won't cover damage to your own car, something that falls under collision coverage in other policies.

Cost: $241 to $556 per year, on average, depending on where you live.

Eligibility requirements: You must be at least 19, have a valid California driver’s license and own a car worth $25,000 or less. You must also meet certain income requirements, which vary depending on how many people live in your household. For instance, if you’re buying a one-person policy, you can earn no more than $29,700 per year to qualify. A two-person household is eligible if the combined annual income is no more than $40,050, and a family of four can earn no more than $60,750.

How to get coverage: To apply, start by filling out an eligibility questionnaire.


Hawaii provides free car insurance to some residents who get financial assistance as part of the state’s Aid to Aged, Blind and Disabled program.

Cost: Free if you qualify.

Eligibility requirements: To receive AABD financial aid, you must be 65 or older or meet one of these criteria:

  • You have a terminal condition that prevents you from working, or your Social Security or Supplemental Security Income doesn't provide enough money.

  • You’re blind.

  • You’ve suffered from a physical or mental disability for at least 12 months that prevents you from working.

  • You live with and take care of someone who receives AABD financial assistance.

How to get coverage: If you qualify for the AABD program, you can ask about getting free car insurance with the Hawaii Department of Human Services by calling 808-586-4993.

New Jersey

New Jersey’s Special Automobile Insurance Policy pays for emergency injury treatment after car accidents, and severe brain and spinal cord injuries up to $250,000. It also provides a $10,000 death benefit for car accident fatalities. It does not offer liability insurance for damage you cause to others’ vehicles or pay to repair your car.

Cost: $360 per policy if you pay upfront, or $365 if you’d rather pay in two installments.

Eligibility requirements: You must have a valid New Jersey driver’s license and be enrolled in federal Medicaid with hospitalization benefits.

How to get coverage: Search for an SAIP provider here or call 1-800-652-2471.

If you aren’t eligible for your state's car insurance program, or your state doesn’t have one, there are still plenty of ways to save on car insurance.

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