Car Insurance for Low Income Drivers and Families

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Since it's a legal requirement in almost every state, car insurance can be a costly necessity for low income families.
Thankfully, there are state programs and options for those seeking car insurance for low income families. You can also save costs with bundling and various discounts.
That’s why the
trusted car insurance broker
and quote comparison app
Jerry
has compiled everything you need to know about finding adequate low income
car insurance
to meet your budget and coverage needs.
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What’s the minimum coverage a low income person is required to have?

With the exception of
New Hampshire
and
Virginia
, almost every state requires that its residents carry a legal minimum amount of coverage.
Each state has minimum requirements, which means that the amount of coverage you are
legally required to carry
will depend on your state.
Almost all states require you to have a minimum amount of
bodily injury liability
and
property damage liability
insurance in place to help cover your costs if you get sued for an at-fault accident.
Many states will require you to carry a minimum amount of either
medical payments (MedPay)
or
personal injury protection (PIP)
insurance as well.
Both of these
types of insurance
will help cover personal costs like medical bills for you and your passengers if you get in an accident.

Government car insurance for low income drivers

Some states provide programs to help make car insurance more affordable for low-income drivers.

Low income car insurance in California

If you are a low-income
California
resident, you could be eligible for the
California Low-Cost Automobile (CLCA) insurance program
that will excuse you from having to meet the state minimum insurance requirements.
To qualify you must have:
  • An income that falls within a 250% range of the federal limit
  • A vehicle that is worth less than $25,000
The CLCA only sells basic insurance packages so you will have to purchase
comprehensive insurance
or
collision insurance
elsewhere if you want added coverage.

New Jersey

New Jersey
residents who are enrolled in the Medicaid program are eligible for the Special Automobile Insurance Policy program.
SAIP or
"dollar-a-day"
insurance provides an affordable legal alternative to the state minimum insurance requirements.
The downside is that SAIP insurance only covers the medical costs associated with an accident. SAIP does not provide collision, comprehensive, or
liability insurance
.
Although SAIP is an affordable option upfront, sparse coverage can leave you financially vulnerable if you get in an accident.

Maryland

If you’ve been denied coverage by two or more providers or had your policy canceled, the
Maryland
Automobile Insurance Fund (Maryland Auto) can help.
Maryland Auto helps provide insurance options for people who are struggling to get a policy through the major insurance providers.

Hawaii

The Hawaii Assistance to the Aged, Blind, and Disabled (AABD) program is designed to help people living with disabilities get access to free car insurance.
In order to qualify for the program, you must be either over the age of 65, legally blind, or totally and permanently disabled. You might also be eligible if you are a caretaker for somebody who already receives assistance through AABD.

The cost of car insurance for low income drivers and families

If you are a low-income driver without access to a state-subsidized program, you will need to buy a standard insurance policy.
Although your credit score may impact your auto insurance rates (depending on your state), your income level will not. Some other factors that will determine your insurance costs are:
  • Age
  • Location
  • Driving history
  • Coverage type
  • Marital status
If you are looking for the most affordable car insurance available, you need to shop around. Jerry is your car insurance broker from end to end.
Just fill out a few questions (that take roughly 45 seconds) and Jerry will present you with competitive quotes from top insurers. You don’t lose coverage, you just find savings. The average Jerry user saves over $800 a year on car insurance.
That being said, here are the average costs of insurance by state and how much the average buyer saves when they use
Jerry
.
State
Price before Jerry
Price after Jerry
AL
2,088
1,061
AR
2,336
973
AZ
2,037
1,111
CA
2,581
1,224
CO
2,273
1,148
CT
6,342
1,324
DC
2,421
1,410
DE
2,368
1,527
FL
3,691
1,545
GA
3,852
1,507
IA
1,351
854
ID
1,376
814
IL
2,541
1,088
IN
1,591
815
KS
2,046
1,037
KY
5,129
1,371
LA
2,624
1,776
MA
3,306
1,482
MD
3,241
1,731
ME
1,437
874
MI
2,873
1,399
MN
1,954
1,080
MO
3,663
1,146
MS
1,928.66
1,047
MT
1,656
604
NC
2,132
1,004
ND
3,600
468
NE
2,164
1,120
NH
1,710
920
NJ
3,031
1,587
NM
1,654
932
NV
2,585
1,266
NY
3,976
2,185
OH
5,898
817
OK
1,902
1,099
OR
1,782
1,030
PA
3,895
1,137
RI
2,175
1,203
SC
2,506
1,324
SD
1,641
975
TN
1,718
957
TX
2,298
1,219
UT
1,935
1,016
VA
1,964
1,034
VT
1,598
885
WA
2,124
1,172
WI
2,128
831
WV
2,235
1,179
WY
2,024
867
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Other ways for low-income drivers to save money on car insurance

Even if your state doesn’t offer a low-income program or you don’t meet the eligibility requirements, there are plenty of ways to save on car insurance.

Jerry is the (proven!) best way to find the cheapest car insurance

It’s this simple: download the
Jerry
app or go to getjerry.com. In less than 45 seconds, Jerry collects all of your information from your existing insurer. Choose from several competitive quotes from up to 40 top insurance companies and Jerry takes care of the rest—securing your new policy and canceling your old one.
No long forms. No calling around. No hard work. Just savings.
"Alexis, thank you so much for working with me. I am on a fixed income and you were able to lower my rates so that they are tolerable. Your staff were so friendly and explained everything. I will recommend you to everyone!" - Satisfied Jerry User

Reduce coverage

If you want to make your insurance rates more affordable, reducing your coverage is a good way to pay less–as long as you maintain the state-required minimum.
Consider
cutting out collision insurance and comprehensive insurance
if you are a low income driver or drive an older vehicle.
While full coverage is always good to have, the cost might not worth it if you don’t have money to spare. The same goes for common insurance add-ons like roadside assistance and
rental reimbursement
insurance.

Increase deductible

Another way to reduce the cost of your policy is to increase your deductible. However, be mindful this option can be risky if you get in an accident and don’t have the money to cover your deductible on your claim.
To avoid this scenario, don’t increase your deductible to more than you can afford to pay. If your deductible is too high, you won’t be able to complete the claims process, which might defeat the point of having insurance in the first place.

Drive an inexpensive car

The type of vehicle that you drive is another factor that will determine your insurance rates. Generally speaking, seek out older models that are equipped with great safety features to score the best insurance rates.
Insurance rates often differ for different makes, models, and even trim levels of vehicles. Insurers will take the value of the vehicle that you drive into account when determining your rates, so newer vehicles usually cost more to insure than used models.
Since
cars cost less
than
SUVs
and
trucks
, they are likely to be cheaper to drive as well–as long as they have a good safety rating. The exception is sport or luxury models, which are pricier to insure because people are more likely to drive them recklessly.

Discount car insurance for low income drivers and families

These are some of the common discounts that you might be able to take advantage of to help make your insurance rates more affordable.
Safe driver discounts
These discounts
will typically apply to anybody who has maintained a clean driving record for about three years or who has taken a defensive driving course.
Most insurance companies offer these types of discounts to good drivers, but some might require you to maintain a
clean driving record
for up to five years to be eligible.
Telematics
When you sign up for a Telematics system like Allstate’s
Drivewise
or Geico’s
DriveEasy
program, you agree to have your driving habits tracked and monitored for a certain period of time.
Some providers will offer an automatic discount just for signing up, while others will analyze your driving habits to determine if you are eligible for a discount.
Good student
Good student discounts will help students manage their car insurance costs when they are getting an education.
Different providers will have different eligibility requirements to receive
good student discounts
, but they are usually most beneficial to younger drivers.
Bundling
Many major insurance providers sell more than just car insurance. When you purchase multiple policies on different types of insurance from one provider, they will often offer up incentives to save through
bundling discounts
.
Most insurance providers will also offer a discount if you take out policies on multiple cars (multi-car policies) as well.
Reduced mileage
Some insurance providers will reward you with a discount for
driving less
driving less.
Typically, reduced mileage discounts apply to drivers who drive less than 10,000 miles per year. You might have to install a mileage tracker to prove you’re eligible.
Pay-in-full discounts
Some car insurance companies will give you opportunities to save on your policy if you
pay upfront
. You might also be able to score discounts for simple things like signing up for paperless billing or getting your quote online.

Pay-per-mile car Insurance

Some major insurance providers provide pay-per-mile policies that can be a good option for some low-income drivers who don’t drive often.
The cost of pay-per-mile car insurance is primarily calculated based on how much you drive.
If your premium rates are already high, pay-per-mile insurance can offer an alternative to policies that base their prices on factors like driving record, age, and credit score.
Pay-per-mile insurance
might not be offered in all states. For instance,
Nationwide
limits their SmartMiles pay-per-mile coverage to 22 states.
Metromile
is a company that specializes in selling pay-per-mile insurance, but it is only available in eight states.

Don’t let your insurance coverage lapse

If you are a low income driver, it might be tempting to let your
insurance coverage lapse
or park your car in storage and cancel your policy. Resist this temptation. It just isn’t worth it.
Most insurers will increase your premium rates if you let your insurance lapse, meaning that long-term costs will almost always outweigh short-term benefits.
If you are caught
driving a vehicle without car insurance
, you could face severe and costly penalties like license suspensions, fines, and blights on your driving record.
In addition, you will be fully responsible for covering the costs of an accident you cause.
The situation is a bit different if you choose to cancel your policy and park your car on private property, but insurers will still view any lapse of coverage as a red flag and will probably make you pay for it in the long run. A better option is to minimize the coverage on a vehicle you aren’t using to keep your insurance rates as low as possible.
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Absolutely.
As long as you are eligible for the discount, you can claim it. Your income has no bearing on whether or not you are eligible to receive discounts on your car insurance.
If you live in Maryland, California, New Jersey, or Hawaii, you might be eligible to apply for government car insurance for low income.
Before you commit to a low income car insurance program, use the smart auto comparison app
Jerry
to find the cheapest rates.
Income limits are dependent on the program you are applying for.
For instance, in California, the income limits for low-income car insurance through the CLCA program depend on the number of people in your household.
  • Single-person households: $30,350 or less
  • Two-person households: $41,150 or less
  • Three-person households: $51,950 or less
  • Four-person households: $62,750 or less
  • Five-person households: $73,550 or less
  • Six-person households: $84,350 or less
Meanwhile, if you live in New Jersey, you will have to meet the Medicaid program’s income requirements to qualify.

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