How can i get free or low cost Car Insurance For Low Income Individuals – Car insurance is necessary in most states however it can be difficult to find affordable coverage if you are on a tight budget. There are many ways in which you can find car insurance for low-income drivers without breaking the bank. For instance, low-income drivers can avail of coverage by purchasing the state minimum auto insurance.
On an average, the cost of a state minimum insurance policy is $467 per year which is 78% less expensive than a full coverage policy of $2150 annually. You can also opt for state-sponsored insurance options if you are living in California, Hawaii, New Jersey or Maryland. This guide will help you to explore car insurance programs for low-income individuals.
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Highlights of this Post
How Much Does Regular Car Insurance Cost For Low-Income Individuals?
A standard car insurance policy with only state-required coverage comes with an average cost of $39 each month as per reports of Forbes Advisors Analysis. In most states, insurance companies consider the credit-based auto insurance score while setting rates and this score has a great weightage in the calculation of rates.
Following are the few factors that insurers take into account to determine the overall car insurance cost.
- Your age and driving license
- Your income
- The make and model of your car
- Your auto insurance claims history.
- State and ZIP code
- Your Gender
- Marital status
- Driving history
- Previous insurance coverage
- Claims history
- Credit score (except in California, Massachusetts and Hawaii)
- Average mileage
- Coverage type and deductibles
How To Find A Cheap Car Insurance For Low-Income Individuals?
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Evaluate Your Coverage
It is basically about how much you can pay or you can afford for the car premiums. There are car owners who go for full coverage premiums and some go for half. Accidents are unexpected so it will be better if the owners pay for the full and basic coverage.
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Compare Quotes
For having car insurance you should have a fixed income to afford the premiums of the insurance. So for that reason you should find those companies who give low premium insurance to the low income individuals. You need to compare quotes and try to find the lowest amount.
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Raise Your Deductible
You should understand that deductible means a part of the claim that you have to pay. The thing is that if you cause $1000 damage to a car and your deductible is $250, you will only be getting $750 from the insurance company.
You can lower your car insurance premium by increasing your deductible. A lower-risk driver will pay a lower premium. Increasing your deductible from $200 to $500 could reduce your coverage cost by 15% to 30%.
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Ask About Discounts
Car insurance discounts are offered by a lot of insurers for different reasons so you can check with your car insurance company to ensure you are getting one that you can be eligible for. For instance, you can get a small discount by paying people less or get a big discount by bundling your renters or home insurance with your auto insurance.
Which Discounts Are Available On Car Insurance For Low Income Drivers?
Insurance companies give some discounts to the low income individuals. These discounts are as follows:
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Payment Discount
Payment discount is a really exciting offer given by the insurance company to the low income individual. Even if your financial condition is really on the edge, you are capable enough to pay the one year’s amount in full. This can save you as you will get a discount.
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Seniority Discount
This is best for a senior income earner who maintains a large family. There are some special discounts for seniors that may be offered to senior citizen drivers upon the completion of an approved defensive driving course.
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Defensive Driver Discount
Having a low rate of accidents can help you get a lower amount of insurance premium. Defensive drivers are those who have lower or no accidents records. For that reason they can get a lower insurance premium.
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Safety Feature Discount
You can get some discounts on installing advanced technology to make sure your car stays safe from accidents. This feature is called an anti lock brake device. Other features include auto lock and airbags to keep the car and the driver safe.
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Reduced Mileage Discount
Individuals who drive their vehicle less than 10,000 miles every year can get reduced mileage discounts from their car insurance company. You just need to install a mileage tracker to prove your vehicle usage and receive this discount.
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Multi-Vehicle Discount
Individuals who possess more than one car or vehicle insured on a single auto insurance policy can be eligible to receive multi-vehicle discounts.
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Anti Theft Feature Discount
If your vehicle comprises theft prevention devices like a passive disabling system or alarm then your car insurance company can provide you with an anti-theft feature discount and help you save some dollars.
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What Are The Different State-Sponsored Low Cost or Free Car Insurance For Low-Income Drivers?
A few states have designed car insurance programs to address the need for uninsured low-income drivers who may have to pay for others’ injuries and damages if they cause an accident which would worsen their financial situation.
Following are the details of state-sponsored insurance programs and the eligibility criteria that may vary depending on your state of residence.
The Low-cost Insurance Program in California was established in 1999 as a means to assist low-income individuals in obtaining affordable and suitable auto insurance irrespective of their immigration status.
To qualify for the program you need to fulfill the following eligibility criteria:
- Be at least 16 years of age or above
- Must have a valid California driver’s license or pending reinstatement
- Should have a good driving record
- Have a California address where you live and park your vehicle
- Own a car valued at or less than $25,000 and have no more than two vehicles registered in your name.
The price of a car insurance program may vary depending on which county you are residing, however an average cost can range up to $268 per year for liability-only coverage. Drivers can add an uninsured motorist coverage by paying $30 additional cost.
You can also purchase medical payment coverage for just $20 per year and the insurance program will pay your and your passenger’s hospital bills and other expenses irrespective of who caused the accident.
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New Jersey’s Special Automobile Insurance Policy works differently from other state low-income car insurance programs as they provide coverage for only medical expenses. The program is designed for drivers who have enrolled in the federally funded Medicaid program with hospitalization coverage.
The program provides medical coverage of up to $250,000 for emergency treatment and a death benefit of $10,000 after an auto accident. The coverage cost of the New Jersey special automobile insurance policy is $365 annually. You are also required to have a valid New Jersey driver’s license and registration certificate.
Low-income drivers in New Jersey who are not eligible for the program can save money to purchase a basic policy instead of buying a robust standard policy.
The basic policy offers limited benefits to drivers but counts as needing the minimum car insurance requirement in the state. The basic policies available to drivers in New Jersey include the following
- Property damage liability of $5000 per accident
- Personal injury protection of $15,000 per accident
- Drivers can add bodily injury liability of $10,000 for all persons included in the accident and collision as optional coverage.
It is very easy to get coverage as you just need to contact the SAIP provider or you can directly call 1-800-652-2471.
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Hawaii Low Income Car Insurance
Hawaii’s Department of Human Services also offers free car insurance to the local residents who are going through financial problems. They offer free car insurance with the help of the agency’s programs.
They do not charge any money as it is free of cost. The insurance is only for the low income families and it is important for an individual to get enrolled in the Medicaid program.
To qualify for the insurance you must have a vehicle and Hawaii driver’s license that is valid. To qualify for this insurance you should receive Supplemental Security Income or other government assistance that has been mentioned below:
- Aid To the Aged, Blind or Disabled
- General Assistance
- Temporary Assistance for Other Needy Families
- Temporary Assistance for Needy Families
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Maryland Auto Insurance Program is geared towards low-income drivers however it is not a state-subsidized program and assists Maryland drivers who are unable to obtain coverage through standard car insurance.
Formerly known as the Maryland Auto Insurance Fund, the Maryland Auto Insurance Program does not consider the education or credit of drivers or if they had a lapse in coverage and assist low-income drivers.
The qualification criteria to get coverage from the Maryland Auto Insurance Program are as follows.
- Be a resident of Maryland
- Must have a valid Maryland driver’s license or own a vehicle registered in the state
- Should be current on your payments
- Have been refused insurance by standard car insurance companies or have been canceled or not renewed by standard insurance for any reason apart from non-payment.
Low-income drivers are finding it difficult to obtain Maryland car insurance because of poor or no credit, being an experienced driver or having lapses in car insurance. You will be guaranteed car insurance as long as you can meet the eligibility criteria.
Cheapest Car Insurance For Low Income Individuals By State
The cheapest type of auto insurance for low-income drivers is the state minimum car insurance policy. The requirement of the minimum car insurance coverage may vary depending on your state however liability insurance will pay for the injuries and damages caused to others if you have caused the accident.
The requirements of the state car insurance policy may mandate you to buy another type of car insurance coverage beyond the liability insurance for instance personal injury protection, uninsured motorist or medical payment coverage.
The cheapest car insurance company available in over 25 states in America is GEICO. USAA is another incredible choice for drivers looking for low-income car insurance having a military connection.
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Cheapest Car Insurance For Low-Income Drivers Nationally
If you are looking for a cheap car insurance program for low-income drivers from a nationwide perspective then Progressive is the best choice for low-income drivers that are available at a rate of $299 annually. This way you can make 49% of savings in comparison to the auto insurance program by Allstate at a rate of $589 per year.
If low-cost auto insurance is your main goal then you can take a look at the following companies with the annual car insurance cost.
- Progressive is a cheap car insurance company and the annual car insurance costs range up to $299.
- USAA auto insurance is available to veterans, military members and their families with an annual car insurance cost of up to $336.
- GEICO is another great option for low-income drivers and the annual car insurance cost can range up to $374.
- Nationwide auto insurance has an annual car insurance cost of $487
- State Farm company has an annual insurance cost of $511.
- Travelers Insurance is available to low-income drivers for $576.
- Allstate provides cheap auto insurance for low-income drivers at $589 per year on average.
- AAA Auto Club Enterprises auto insurance comes with an average monthly cost of $63 and the average annual cost is $754
- American Family Insurance is another great option that comes with an average monthly cost of $68 and an average annual cost of $810.
State Farm is one of the best car insurance companies for low-income drivers due to several reasons, for instance low average rates, good discounts and a wide variety of auto coverage options. The company also provides a usage-based program called Driver Safe and Save that helps drivers save money.
GEICO is another best car insurance company for budget-conscious drivers, especially low-income individuals. The average price of GEICO is 24% cheaper than the average national market. The company provides affordable rates for different drivers, especially those with speeding tickets or accidents.
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How Can Low-Income Drivers Save Money On Car Insurance Costs?
If you are not eligible for any of the state’s car insurance programs you can save money on your car insurance through the following ways:
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Keep Up With Your Credit Score
Many people don’t realize that car insurance companies review the credit scores and credit histories of potential customers before providing a policy.
A high-risk driver will pay a higher premium than a low-risk driver. Having a low-income certainly does not mean you have poor credit.
Learn about what car insurance providers are looking for in a credit score, and take some steps toward improving your credit. A good credit score could put much-needed money back into your pocket.
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Shop Around
You should clearly understand that every insurance company follows their own rules. If you are struggling with your car insurance premium now, shop around and make sure you are getting the best coverage at the cheapest rate.
After you’ve gotten quotes from other insurance companies, compare the coverage levels, premiums, and deductibles quoted to be sure you are comparing equivalent information.
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Reduce Your Coverage
If you have an insurance policy with additional coverage that you do not need then consider lowering your coverage to lower your car insurance costs. For instance, you can drop collision and comprehensive coverage if you have an old car model with a low value.
Similarly, you can cut additional costs like roadside assistance or rental reimbursement particularly if you have roadside assistance from organizations like the American Automobile Association or your car company.
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Go For Usage-Based Insurance
Pay-per-mile auto insurance policy is the one that is suitable for low-income drivers and helps them to reduce their costs if they do not drive a lot.
Low-income drivers can find affordable car insurance coverage by opting for usage-based programs known as telematics insurance that track the driving habits of individuals and award them car insurance discounts based on safe driving.
For instance, State Farm’s Drive Safe And Safe And Progressive Snapshot. Mileage-based programs like Nationwide SmartMiles or MetroMile are also suitable options to consider if you do not drive often.
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Purchase A Car That Is Cheaper To Insure
Few cars cost more when it comes to buying car insurance compared to others for several reasons for instance history of costly claims, higher value or higher chance of being stolen. To reduce the car insurance cost you can research carefully and decide if you should change your vehicle to the one that car insurance companies found less of a risk and will be less costly to insure.
You need to evaluate which car models are the most and least costly for car insurance before buying one to ensure you opt for a car that is cheaper to insure.
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Cure Auto Insurance
Low-income drivers who are residents of New Jersey, Michigan or Pennsylvania can look into the Citizens United Reciprocal Exchange known as Cure Auto Insurance to save some cost of insurance policy.
This is a not-for-profit car insurance company that emphasizes driving behavior while calculating rates on insurance policies. The company does not consider factors like education, credit score or occupation while determining the rates so you can easily find cheaper rates compared to other insurance companies.
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Conclusion
Purchasing car insurance is pivotal. Low-income drivers who live in New Jersey, California or Hawaii can access state programs for low-income car insurance to save cost on their car insurance policies. Other low-income drivers can find affordable car insurance coverage by following the aforementioned resources. You need to compare car insurance quotes from different companies to find the most suitable option that aligns your budget and needs.
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Frequently Asked Questions
What Are Government Auto Insurance Programs?
Basic auto insurance is required by law in most of the states. Therefore most of the drivers are required to get car insurance and the premium rates will surely vary from state to state. In some states the price might be high and in some states it can be low.
How Will Your Income Affect The Car Insurance Rate?
Unlike a loan, insurance companies do not review your income to determine if you should get approved for coverage. Instead, insurance companies use other factors, like your credit score, claims history, age and ZIP code to calculate your premium. People with a low credit score pay more money for their car insurance because they are considered high-risk.
How Can Low-Income Drivers Qualify For Cheap Car Insurance Premiums?
Low-income individuals can get good discounts on their car insurance policies. Discounts such as good driver discounts, reduced mileage discounts, safety feature discounts etc. can lower their auto insurance premium by 30% annually.
How Can I Apply For Low-Income Auto Insurance?
Residents of Hawaii, New Jersey or California can apply for the public auto insurance program provided by the state government. Low-income drivers in these respective states including drivers from other states in America can purchase affordable auto insurance online.
Which Company Provides The Cheapest Car Insurance?
The cheapest car insurance companies may vary by state. Additionally, every driver pays a different rate based on their zip code, age, credit score, claims history, the car they drive etc. Based on our research, Geico, Nationwide and State Farm tend to offer consistently affordable premiums.
