How To Find Insurance for Low-Income Drivers in 2021

Fran
Lucy Lazarony
March 2, 2021

The cost of car insurance has been continually rising at an annual rate of up to 12 percent. Your income isn’t technically a factor in setting your car insurance rates. But you’ll find it more difficult to pay car insurance bills if you have a low income. Luckily, there is hope if you are looking for low income car insurance. This article focuses on car insurance designed for low-income drivers in California, Hawaii and New Jersey.

In other states where there is no special program for cheap car insurance for low-income individuals, car insurance is still required by law. So you’ll have to find low income car insurance by comparison shopping. SmartFinancial can do all the hard work for you. All you do is fill out one form and they’ll scour over 200 insurers to find you the right match. The average monthly cost of car insurance is $120.69, according to SmartFinancial, who will try to beat that price in minutes.

State Minimums and How They Affect Low Income Car Insurance

Your monthly premiums will depend greatly on where you live. Every state has required minimums for liability car insurance, except New Hampshire. Some states also require personal injury protection (PIP) and uninsured and underinsured motorist coverages. Full coverage car insurance includes collision insurance and comprehensive insurance and liability and any other state-required car insurance coverages.

Types of Car Insurance Coverage

Liability insurance always covers “the other guy” if you’re at fault in an accident. It never pays for repairs on your car if you caused the collision.

Collision insurance is coverage that helps to repair or replace your car if you’re at fault in an accident with another vehicle or object such as a fence, tree or guardrail. Comprehensive insurance covers some events that aren’t covered by collision insurance. These events include fire, theft, vandalism and damages from weather such as a hailstorm, windstorm, tornado and hurricane. If you ever cause an accident, liability insurance pays for other people’s injuries and property damage up to your liability limit. Having a full coverage car insurance gives you a strong level of protection should an accident happen. With liability-only coverage, you’ll be able to pay for the other driver’s injuries and property damage if you are at-fault in an accident but you will have to pay for repairs to your car and your medical expenses out of your own pocket. Low-income drivers often pay more for car insurance, especially if they have low credit scores and live in a state that uses credit ratings to determine car insurance rates. But it is possible to find low income car insurance if you compare car insurance rates.

California Low-Cost Automobile (CLCA) Insurance Program

California’s Low Cost Automobile program (CLCA) was established in 1999. The program provides income-eligible drivers with liability insurance at an affordable rate. With the CLCA program, each policy provides liability coverage for the vehicle’s primary driver and eligible secondary drivers. Each individual car owner may buy separate policies to insure up to two vehicles under the program.

The program has specific household income eligibility levels that drivers must meet. For example, a household with one person must have a maximum income eligibility of $32,200. A household of two people has a maximum income level of $43,550. And a household with four people has a maximum income level of $66,250. To qualify for the program, you need to have a valid California driver’s license, meet income eligibility guidelines, own a vehicle valued at $25,000 or less, be at least 16 years of age and have a good driving record. The program provides affordable, liability-only auto insurance that meets California’s financial responsibility laws. The basic liability policy limits are $10,000 bodily injury or death per person, $20,000 bodily injury or death per accident and $3,000 property damage liability per accident. For an additional $39 to $104 per year, drivers can buy $1,000 medical payments per person, $10,000 uninsured motorist bodily injury per person and $20,000 uninsured motorist bodily injury per accident. Payments can be made in full or by putting 20 percent down with seven installment payments. Annual insurance premiums for the program vary by county and range from $244 to $966

Other Options for Low Income Car Insurance in California

If you don’t qualify for CLCA, check out the cheapest car insurance in the U.S. You may find the cheap coverage you are looking for. There is also Wawanesa Insurance in California. Wawanesa is number one in customer satisfaction for auto insurers in California and best for price and claims, according to J.D. Power. And there is the Grange Insurance Association. Grange Insurance has been providing insurance since 1894. Based in Seattle, Washington, the company has insurance services, including auto, in Washington, Oregon, California, Idaho, Colorado and Wyoming. CSAA Insurance Group is a AAA insurer and is another reputable personal lines and property casualty insurance groups in the U.S. CSAA offers auto insurance and home insurance to AAA members across the nation.Another option is Esurance, which is an Allstate company that offers car insurance in 43 states. Better yet, compare over 200 companies with SmartFinancial in three minutes.

New Jersey’s Special Automobile Insurance Policy (SAIP)

In New Jersey, the Special Automobile Insurance Policy (SAIP) helps to make limited auto insurance coverage available to drivers who are eligible for federal Medicaid with hospitalization. Drivers can obtain a medical coverage only insurance policy at a cost of $365 a year. SAIP is an initiative to help make auto insurance available to drivers who are likely to go uninsured because of limited financial resources. New Jersey’s Special Automobile Insurance Policy (SAIP) can be obtained through SmartFinancial. To apply for SAIP, you need a Medicaid identification card.

A SAIP policy covers emergency treatment following an accident and treatment of serious brain and spinal cord injuries up to $250,000. It also provides a $10,000 death benefit. SAIP does not cover outpatient treatments such as doctors’ visits covered by Medicaid, damage you may cause to other people or their property or damages to your own car. You cannot get a SAIP if your driver’s license or registration is revoked or suspended. Not able to qualify for SAIP? There are affordable car insurance policies out there. Check out the cheapest car insurance companies in the U.S.

Hawaii Assistance to the Aged, Blind and Disabled (AABD)

In Hawaii, Assistance to the Aged, Blind and Disabled (AABD) provides cash benefits for food, clothing, shelter and other essentials including free car insurance. Recipients must be 65 and older, blind, disabled and with low income levels. The Hawaii Assistance to the Aged, Blind and Disabled program is for people who have income below 34 percent of the federal poverty line and resources not exceeding $2,000 for a single person and $3,000 for a couple. Not able to qualify for AABD? There are affordable car insurance policies out there wherever you live. Compare car insurance rates with SmartFinancial for the best deals. You may find the ultra-affordable car coverage that you are looking for. A little bit of shopping around is all it takes to find low income car insurance.

Cheap Car Insurance in New Jersey and Pennsylvania

Headquartered in Princeton, New Jersey, Citizens United Reciprocal Exchange (CURE) offers car insurance rates primarily based on a person’s driving record and not education or occupation.

Cheap Car Insurance in Maryland

The Maryland Automobile Insurance Fund sells automobile liability insurance to Maryland residents who are unable to obtain the insurance privately. To be eligible for the fund, a driver must have been rejected by at least two private insurers or have had an automobile insurance cancelled or not renewed for any reason other than nonpayment of premiums.

How Much Is Car Insurance for Low-Income Drivers?

If you don’t qualify for a state program, you can still get low prices on car insurance by comparing insurance rates with SmartFinancial. SmartFinancial has access to more than 200 insurance companies so you are bound to find the low-rate car insurance that you want.

There are many factors that will affect your auto insurance rate. These factors include:

  • Driving history
  • Credit Score
  • Age
  • Gender
  • Insurance History
  • Annual Mileage
  • Where You Live
  • Marital Status
  • Coverage You Choose
  • Vehicle You Drive

Average Car Insurance by State

Here is a listing of the average monthly car insurance rates for each of the 50 states and the District of Columbia. Rates change constantly, but these were the averages upon publication.

  • Alabama $107.56
  • Alaska $123.67
  • Arizona $111.63
  • Arkansas $109.98
  • California $158.65
  • Colorado $138.23
  • Connecticut $137.26
  • Delaware $128.51
  • District of Columbia $169.20
  • Florida $217.89
  • Georgia $138.86
  • Hawaii $109.83
  • Idaho $72.57
  • Illinois $103.37
  • Indiana $86.75
  • Iowa $84.00
  • Kansas $113.04
  • Kentucky $119.61
  • Louisiana $207.79
  • Maine $69.42
  • Maryland $160.27
  • Massachusetts $113.23
  • Michigan $161.46
  • Minnesota $112.17
  • Mississippi $108.89
  • Missouri $109.20
  • Montana $106.52
  • Nebraska $91.40
  • Nevada $143.37
  • New Hampshire $97.36
  • New Jersey $169.56
  • New Mexico $119.63
  • New York $205.63
  • North Carolina $79.53
  • North Dakota $99.26
  • Ohio $87.09
  • Oklahoma $135.12
  • Oregon $105.47
  • Pennsylvania $116.28
  • Rhode Island $156.73
  • South Carolina $107.05
  • South Dakota $108.74
  • Tennessee $93.40
  • Texas $138.81
  • Utah $105.76
  • Vermont $84.78
  • Virginia $93.06
  • Washington $99.29
  • West Virginia $128.90
  • Wisconsin $88.14
  • Wyoming $121.48

How Low Income Drivers Can Save on Car Insurance

There are many discounts available to low income car insurance buyers.

Good Driver Discount. Be a squeaky-clean driver with no at-fault accidents, no speeding tickets, no moving violations, no DUIs and you’ll qualify for a good driver discount and save money on car insurance.

Try Bundling. If you have auto insurance and home insurance at the same company, bundle the policies together. You’ll save money on your premiums.

Pay Once or Twice A Year. Rather than paying monthly auto insurance bills, pay the entire annual amount or six-months amount. Your premium is lower when you pay just once or twice a year.

Go Paperless. Choose to use e-documents and e-policies with your car insurance account and you’ll save money on your car insurance.

Maintain Car Insurance. You’ll pay higher insurance rates if you don’t maintain continuous coverage of your car insurance. So stick with your insurance coverage and you’ll save money on your car insurance premium.

Check Car Safety Features. Having certain anti-theft features and safety features on your car will lower your car insurance. So check to see if the features on your car warrant a discount.

Review Memberships. Members of particular professional organizations and affiliate groups get discounts on car insurance. Check the memberships in your wallet and see if you qualify for a discount.

Check for Discounts. Students and veterans may be eligible for discounts from car insurance companies. If you are a member of one of those groups, reach out for your discount

Low-Mileage Discount. Drivers who maintain low mileage pay less for car insurance. So cut back on your mileage and save.

Take a Driver Safety Class. You’ll brush up on the rules of the road and on safe driving behaviors with a driver safety class. Taking the class will save you money on your car insurance.

Get a Good Student Discount. Do you have a high school or college student with good grades? If their grade average is “B” or higher, they may qualify for a good student discount on car insurance.

Pay-per-mile insurance is another way to save money on low income car insurance. With these programs, your premium is based on the miles you drive. Let’s look at an example from MetroMile.

MetroMile uses the MetroMile mobile app to track a customer’s mileage for 17 days. After that time, insurance rates are established for the customer. MetroMile only tracks a customer’s mileage and not driving habits such as speed and braking. MetroMile is only available in eight states.

SmartMIles, a pay-per-mile program offered by Nationwide, is currently available in 22 states. According to Nationwide, drivers can save up 10 percent with their safe driving habits.

Allstate’s Milewise is pay-as-you-go car insurance. With Milewise, you pay a low daily rate and a per-mile rate when you drive. Milewise is available in 16 states.

Mile Auto specializes in pay-per-mile insurance and is available in three states. Liberty Mutual’s ByMile is available in two states.

Other Tips for Drivers Who Want Low Income Car Insurance

Really need to save money on car insurance? You can reduce the number of cars you own and get around by public transportation. You also can reduce the car insurance coverages that you carry. But you’ll want to be careful about reducing coverages, cut back too much and you are vulnerable if you should cause an accident and have to pay for damages through your reduced liability coverages. If there is not enough coverage, you may have to pay for medical bills and property damage out of your own pocket. So weigh the pros and cons of reducing your coverage carefully.

If you are a good driver, you may want to consider a telematics program, in which driving behavior is monitored and good driving gets rewarded with lower rates. With Progressive Snapshot, you can save an average of $145 a year with safe driving. With Allstate Drivewise, safe drivers can save 40 percent or more off premiums. With State Farm Drive Safe & Save, you can save up to 30 percent. The amount you can save with Esurance DriveSense varies. But you do save 5 percent when you sign up. At Nationwide, you can save up to 40 percent with its SmartRide program. At Liberty Mutual, you can save up to 30 percent with RightTrack.

What Happens if I Cancel My Car Insurance?

You’ll pay a stiff penalty if you get caught driving without car insurance. In Massachusetts, you could face a fine of $5,000, spend up to one year in jail and lose your driving privileges for a year. In Florida, you face a $150 to $500 fine and your driver’s license, registration and license plate will be suspended.

In Kentucky, the driver without insurance may not operate a vehicle in Kentucky until insurance has been obtained. There is also a fine of $500 to $1,000, up to 90 days in jail or both. A lapse in insurance will always raise your rates even if you no longer own a car. Once you break continuous insurance coverage, you’ll pay more when you do sign up to begin insurance coverage again. So stick with your car insurance coverage for as long as you can. Doing so saves you money on your car insurance.

Cheapest Car Insurance Companies for Low Income Car Insurance

Looking for a cheap car insurance company for your low income car insurance? Check out these four companies. USAA has an average monthly insurance rate of $121.47. State Farm is just a little bit behind USAA with a monthly rate of 161.83 and coming in fourth is Nationwide with a monthly rate of $213.29. These car insurance companies offer more than competitive rates.

USAA is an organization founded by military members for military members and their families. So you’ll need a military background to take part. USAA sells insurance, including auto insurance, and financial services products.

Geico is the second-largest auto insurer in the U.S. Geico was founded in 1936 and insures more than 28 million vehicles in all 50 states and the District of Columbia.

State Farm was founded in 1922. With 48,000 insurance agents and 83 million policies, State Farm has been providing insurance coverage for almost 100 years. Originally, State Farm was a single line auto insurance provider but today they offer about 100 insurance products and services in five lines of insurance.

Nationwide began in 1926 with the goal of selling auto insurance at low rates to farmers in Ohio. Today, Nationwide is a Fortune 100 company with a full range of insurance and financial services all across the country.

Not sure which company is right for you and the low income car insurance that you want? Compare them all with one short form with SmartFinancial.

How Much Coverage Do I Need with Low Income Car Insurance?

Keeping your eye on costs is a natural thing to do when selecting car insurance coverage and choosing low income car insurance. Let’s start off with the coverage you absolutely have to buy. You’ll need to purchase the state minimum insurance coverages, including the liability insurance. And you may want to purchase more liability insurance than that since the state liability coverage limits are so low that they may not protect you if you should cause a serious accident. Insurance experts recommend getting $100,000 of bodily injury liability coverage per person, $300,000 of bodily injury liability coverage per accident and $100,000 property damage liability coverage per accident.

Go over the costs with your insurance agent. You want good liability coverage at a price you can afford. Weigh the pros and cons of the costs carefully. Choosing a high deductible is one way to lower your auto insurance premium. A deductible is the amount you need to pay before your auto insurance company begins to pay for damages to your car or losses. Both collision insurance and comprehensive insurance come with deductibles. One way to lower costs is to choose a higher deductible for both of these insurance coverages.

But if you have an older car with high mileage that is worth less than $4,000 you may decide not to carry collision and comprehensive coverages any longer. The maximum payout for collision insurance and comprehensive insurance is limited by the value of the car. So if you have an older car with a low market value, it may not make financial sense to carry collision and comprehensive coverages any longer. You won’t have full coverage insurance any more but you will have cheaper auto insurance bills.

Factors that Affect Your Rate

Looking for low income car insurance? Follow these tips. All these factors affect auto insurance rates.

Drive a Safer Car. Cars with better safety ratings are cheaper to insure. Not sure how your car stacks up? Check safety ratings with the Insurance Institute for Highway Safety and National Highway Traffic Safety Administration.

Get Married. Believe it or not, there is a correlation between being married and exhibiting safe driving behavior. Because of this correlation, married drivers get a break on their auto insurance. Just married? Let your car insurance company know the good news. You’ll save on your premium.

Buy a House Instead of Renting. People who own homes drive more safely. And because of their safe driving habits, homeowners pay less on their car insurance. Bought a home in the past year? Let your auto insurance company know so you’ll get the savings on your car insurance.

Fix Your Credit. In most states, your credit plays a big role in the car insurance premium that you pay. People with good and an especially excellent credit enjoy low and very low rates on car insurance. People with no credit or bad credit pay much higher rates. Looking for a way to improve your credit? Get current on all past-due accounts, pay down debt and avoid taking on new debt. All these things will help to give your credit score a boost.

Garage Your Car if You Live in a High-Crime Area. You may not be able to change your neighborhood but putting your car safely in a garage when you are home will help to protect your vehicle and give you a lower insurance rate.

Add Safety Features to Your Car. Most car insurance companies offer discounts on car insurance for having safety features on your car including anti-theft devices. If you have a newer car you may already have these features on your car. But if you don’t, adding some safety features will help to lower your car insurance. These features include anti-lock brakes, anti-theft devices, tracking devices such as OnStar or LoJack, daytime running lights, and safety technology such as electronic stability control.

Get a Cheaper Car. Another way to get low income car insurance is to drive a cheaper car. More expensive cars are more expensive to insure. Newer cars also cost more to repair. Car insurance companies may offer a new car discount when you insure your new car with them. So there are some insurance savings available to new car owners. Ask about the new car discount when signing up for insurance for your new car. You may get some nice savings on your premium.

Fix Your Driving History. Improving your driving record will help to lower your car insurance costs. Consider taking a driving safety class to erase points from your driver’s license.

Get a Higher Educational Degree. Drivers with bachelor’s and graduate degrees pay less on car insurance than drivers with a high school degree or those without a high school degree.

Move to a Safe Neighborhood. Move you and your car to a safe neighborhood. You’ll pay less on car insurance rates if you do. Not all good neighborhoods are overpriced. You want a good safe neighborhood that you can afford. Making a safe neighborhood home will lower your car insurance.

How Much Does Cheap Car Insurance Cost?

Here are the top 10 cheapest car insurance companies, according to SmartFinancial. The prices are per month, but note that they change constantly. These were the rates upon publication. Check out these low income car insurance rates.:

  1. Concord Group $68.98
  2. Countryway Insurance $76.65
  3. North Carolina Farm Bureau $86.42
  4. Bear River $92.56
  5. Buckeye Insurance Group $92.70
  6. Pekin Insurance $96.75
  7. Virginia Farm Bureau $96.85
  8. MMG Insurance Company $97.00
  9. Utica National Insurance Group $99.09

Get a Free Auto Insurance Quote Online Now.

Related Articles

Auto Insurance AARP Hartford Auto Insurance Review

AARP began in 1958 as a nonprofit membership organization for 50+ individuals. The AARP Hartford Auto Insurance Program has been around since 1984.

Auto Insurance Insurance Comparison Sites: What You Need to Know

Several new insurance comparison sites promise to compare all the available policies to pinpoint the one that’s perfect for you. Which is best?

Looking for Auto Insurance?

Compare rates from dozens of companies in less than 3 minutes.