Government Auto Insurance for Low Income Families

Is government auto insurance an available option for you? There are no two ways about it — auto insurance premiums can take a big chunk out of your budget. Average annual premiums vary by state, usually between $900 – $2500 per year.

For some people, this presents a serious challenge. Your car is a necessity, and all 50 states require that you are covered by an insurance policy while driving. If a quote from Geico or State Farm has left you feeling frustrated, you may want to look into government or low-income auto insurance.

In the following article, we’ll dive into this topic, explain your options, and educate you on how government auto insurance works. Specifically touched on are….

What is Government Auto Insurance?
Who Qualifies For Low-Income Car Insurance?
Where is Government Auto Insurance Available?

Let’s get started….

What is Government Auto Insurance?

People living on modest incomes end up paying a comparatively high percentage of their income for insurance coverage. The same premium represents much less of a hurdle for wealthier people. This is where government programs come in.

Government auto insurance is a set of programs/policies sponsored by the federal government to assist lower income families and individuals. These programs attempt to level the playing field.

This assistance generally comes in two formats:

  1. A subsidy or tax break to help people afford their insurance bills, or
  2. A program run directly by the state that offers discounted insurance

Each state has a slightly different set of insurance laws.

Who Qualifies For Low-Income Car Insurance?

There are some eligibility requirements that one must meet in order to be qualified for these types of policies/plans. These vary state to state and you need to check with local authorities to be sure. But the criteria typically are:

  • Income below a certain threshold.
  • A driver above the age of 19 or having 3 years of driving experience.
  • A clean or at least decent driving record (a DUI may limit your options, for example).
  • Vehicle value below a certain threshold, often $20,000.
  • A disability or other legally protected status.

The Americans with Disabilities with Act (ADA) was passed in 1990 and its aim is to fight discrimination against those with disabilities. Unfortunately, the ADA’s effect on auto insurance is not terribly straightforward. But If you’d like to learn more check here or speak to an insurance agent.

Where is Government Auto Insurance Available?

Let’s take a look at some of the states with the best-established government auto insurance programs.

  • California – The Golden State has the well known Low-Cost Automobile Insurance (CLCA) program for lower income folks. Signed into law in 1999 it was designed to provide liability car insurance at affordable rates. It boasts coverage of $10,000 for bodily injury or death per person; $20,000 for total bodily injury or death when multiple people are hurt in an accident; $3,000 for property damage.

To learn more check the CLCA website [1].

  • Hawaii – Has a unique approach when it comes to government-sponsored auto insurance. Any person meeting the ADA requirement, or receiving financial assistance from the government may be eligible to receive personal injury protection and liability insurance from the state. Best of all this comes at no charge.

To learn more and see if you qualify you can check the State of Hawaii’s Consumer Affairs website [2].

  • New Jersey – In New Jersey, the plan to help low-income drivers is called the Special Automobile Insurance Policy (SAIP). SAIP is also unique in that to be accepted into the program you must be enrolled in or eligible for Medicaid. SAIP premiums are paid in one or two installments and typically cost between $350-400.

SAIP has you covered for emergency treatment after a car crash, and additional medical costs up to a limit of          $250,000. While this program may not provide much in terms of comprehensive coverage, it’s better than not having any protection. You can apply for SAIP with most insurance agents in New Jersey, and for more details check out the SAIP website [3].

Most major insurance companies will typically offer discounts to government workers or veterans. Sometimes these discounts can be quite substantial, so this is worth keeping in mind. In addition, there are some low-income insurance policies available from:

  • Access General
  • Bristol West
  • Carnegie General
  • Eastwood Insurance
  • GMAC
  • Infinity
  • Progressive
  • Western General
  • Western United


Insurance can cost a lot, and if you’re on a tight budget you may find it unaffordable. If this is the case for you, it’s good to know there are some low-income car insurance options available.

The ones mentioned above are the best known — if you’re not sure where to start give a local insurance agent a call and they should be able to help you. Be aware, however, that they may try to sell you their own policy. Just stick to your guns and remember:

    • Government auto insurance helps people in some states with low-cost insurance plans. In other states, you may be able to find tax credits or breaks to help offset the cost of insurance.
    • Requirements vary, but generally, you need to: be below a certain income level, have a good driving record, not have an expensive car and/or have a disability.
    • New Jersey, California, Hawaii, and Maryland have the most prominent government auto insurance plans — in other states, you may have to dig around to find what options are available to you.



1 – California Department of Insurance
2 – Hawaii Department of Consumer Affairs
3 – New Jersey Department of Insurance and Banking

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