Key takeaways
- California, Hawaii and New Jersey offer government-sponsored programs to help low-income drivers get insurance.
- Eligibility requirements vary by state.
- You can still find ways to save on car insurance, even if you aren't eligible.
Car insurance is legally required for most drivers, but not everyone can afford it. The average cost of car insurance in the U.S. is $621 per year for required minimum coverage, according to NerdWallet’s May 2026 rate analysis. And many drivers — such as those who lease or finance a vehicle — may be required to carry full coverage insurance, which costs $2,317 per year, on average.
While alternatives for low-income drivers are slim, a few states offer government-sponsored car insurance programs to help keep people from driving uninsured. These low-income car insurance programs typically offer limited coverage at greatly discounted rates.
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Low-income car insurance programs by state
California
Through California’s Low-Cost Auto Insurance program, Golden State residents can buy the minimum liability insurance needed to drive legally. You can also add:
- Uninsured motorist bodily injury coverage, which pays your medical bills if you get into an accident with an at-fault driver who doesn’t have insurance.
- Medical payments coverage, which pays medical bills for you and your passengers, regardless of who’s at fault for a wreck.
The program’s insurance won't cover damage to your own car, which falls under collision coverage in standard policies.
Cost: $199 to $920 per year, on average, depending on where you live and your age.
Eligibility requirements: You must be at least 16, 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. These are the maximum income limits for one- to four-person households:
- One person: $39,900 per year.
- Two people: $54,100 per year.
- Three people: $68,300 per year.
- Four people: $82,500 per year.
How to get coverage: To apply, start by filling out an eligibility questionnaire.
Hawaii
Hawaii’s Department of Human Services provides free car insurance to some residents who receive financial assistance through the agency’s programs. These policies include the minimum amount of liability coverage and Personal injury protection required by state law, but drivers add things like comprehensive coverage or uninsured motorist coverage at an additional price.
Cost: Free if you qualify.
Eligibility requirements: You must be the sole owner of a vehicle and have a valid Hawaii driver’s license, or be unable to operate your vehicle due to a permanent disability. You must also receive supplemental security income or assistance from one of the following programs:
- Temporary Assistance for Needy Families.
- General Assistance.
- Aid to the Aged, Blind or Disabled.
How to get coverage: Contact one of the state's processing centers.
» MORE: Cheap car insurance in Hawaii
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 doesn't cover outpatient care, liability insurance for damage you cause to others’ vehicles or repairs for your car.
Cost: $360 per year for the policy if you pay upfront, or $365 if you’d rather pay in two installments.
Eligibility requirements: You must be enrolled in federal Medicaid with hospitalization benefits. You must also have a valid New Jersey driver’s license and registration.
How to get coverage: Search for an SAIP provider or call 1-800-652-2471.
Other ways to find cheap car insurance
Not everyone is eligible for government-funded car insurance programs, and your state may not even offer one. But there are other ways to save on car insurance.
Shop around. Every insurance company sets its rates a little differently. We recommend getting car insurance quotes from at least three carriers before deciding on a policy. Shop once a year to make sure you’re still getting the best price.
Raise your deductible. A car insurance deductible is the part of a claim you’re responsible for paying. Say you hit a deer, causing $1,000 of damage to your car. If your comprehensive deductible is $250, your insurance company would pay out $750.
Raising your deductible will lower your car insurance rate, but it can be risky. If you’d have trouble coming up with enough money to pay a high deductible, choose a lower one.
Ask about discounts. Most carriers offer savings for things like driving safely, having anti-theft features in your car and bundling auto and home insurance policies. Ask your agent if you’re getting all the discounts you’re qualified for.
Drop coverage you don’t need. If your car isn’t worth much, it probably doesn’t need comprehensive or collision insurance. These coverage types pay only up to the total value of your car, minus the deductible. Dropping them can save you hundreds of dollars a year.
