Insurance for Low Income Households
Sometimes, we get into a position where we have to decide between things you know have to be done, like paying for car insurance or paying for your rent. If you find yourself in that situation, you are not alone. There are many drivers in the United States that would risk their car insurance coverage to pay other bills, even though not having car insurance is illegal. This is understandable, federal minimum wage has been staying the same, but the cost of living and the cost for insurance has been rising every year.
There are some solutions that can help, low income families are able to get low-cost car insurance from state government programs or traditional insurance companies.
Start saving with Lowered Rates
It may be good practice to see what cheap car insurance options are waiting for you before checking if you qualify for a special insurance program.
Your best option is to use a website like Lowered Rates, which can help you find what the cheapest rates are around you.
It will save you time searching for quotes, and better yet, it’s free. You will be able to see and compare prices between insurance companies, and any special programs.
Annual Insurance Premium Average by State
Depending where you live, car insurance premiums may be higher or lower than the national average. There are several factors that go into determining your rate like crime rates, weather, how close you are to wildlife, state minimums, and population. The more people, the higher risk for accidents.
Car insurance rates will be higher in low income neighborhoods because of the higher risks of theft, accidents, repairs and car usage.
How to get cheap auto insurance.
When auto insurance comes up with a rate for you, they look into different factors, and they are all weighed differently. This is why when you look for auto insurance quotes, they can widely vary from one company to another. This is why looking around for different quotes and looking for discounts is essential if you are looking for the best rates.
Below are averages for annual car insurance premiums using data from each state’s Department of Insurance:
|Insurance Company||Monthly Quote|
Keep in mind that these are averages. Different factors will change how high or low your car insurance will be, like your driving record. So look for auto insurance quotes from multiple insurance companies and not just ones that offer cheap rates.
Finding your own car insurance quotes give you the ability to pick and choose for yourself what insurance suits you. If you want the cheapest car insurance, low or no down payment, or to get the most out of your policy, Lowered Rates can help you find the best car insurance for you.
Making the right choices for coverage.
If you think about the coverage you only need, it can drastically lower your insurance rate.
First you want to look at how much the minimum is required by state, so you are obeying the law. You could also pay a higher deductible so that your premium is lower. Only Downside about that is that you will have to pay more out of pocket in case of an accident. Keep in mind, you also want to keep it affordable if you do get into an accident.
Your vehicle is also a factor that goes into your car insurance premium. If you have a reliable car such as a minivan or a sedan, they will be cheaper to insure. Especially if they are used.
If you do have an older car that can be replaced easily, you can opt out of collision or comprehensive coverage. If you do not want to opt out, you can lower it as well. The coverage means they will pay you in the event of a theft, or an accident. If your car value is low, then the cost of replacing it could be more than how much the car costs. So you can probably do with the comprehensive or collision.
Remember if you do have multiple vehicles, they do not have to be the same. Older cars may possibly be replaced, but newer cars will not be. You want to customize insurance for every vehicle to keep you from paying for anything unnecessary.
Discounts for low income drivers.
Most insurance companies will have discounts so you can lower your insurance, regardless of your income level. Some of these discounts range from a variety of things. For example, having multiple vehicles or drivers in the same policy, and good student discounts for students with above average gpa.
Here are some other discounts that might apply to you or your family.
Good driver discount: If you have not been in any accidents or have not gotten any tickets in the past three years, most insurance companies will give you a discount. Some may require you to have five years.
Defensive driving discount: If you take and pass a defensive driving course will be able to get you a reduced rate as well. Be aware though, that you may have to take the test every year or two.
Driver training discount: If a driver is under the age of 21 and he or she takes an approved driving course, may be eligible for a discount. This is something families should take into consideration since insurance for drivers under 25 tend to be more expensive.
Reduced mileage discount: If you do not drive much, and you drive less than 10,000 miles per year. You can qualify for a discount. Some companies will have you install a tracker in your car in order to keep track.
Discounts on vehicles:
Multi-vehicle discount: if you insure more than one vehicle on a single policy may result in a discount.
Safety features discount: Some safety features on your car can get you better rates. For example, airbags, daytime running lights, and anti lock brakes are all safety features insurance providers like.
Anti-theft device discounts: If you have theft prevention devices installed in your car, you will be able to get a small discount. The discount usually won’t be much but since its something, then why not.
If it is not required where you live, it may be a good idea to complete a driver’s education and defensive driving course. This will show that you’re serious about being safe and responsible. Companies will reward these behaviors with discounts.
Government-sponsored car insurance
Some states have funded auto insurance for low income families because of the disadvantages they face. By having government sponsored car insurance they ensure low income families can be covered. This works best for families or individuals that are disabled or sponsored by the government.
California, Hawaii, and New Jersey are the only states right now that offer low income insurance. This can change at any time, and more states may be willing to offer low income insurance. You can contact your local DMV office to find out if your state offers low-cost auto insurance or any financial assistance.
California Low-Cost Auto Insurance Program (CLCA)
Created in 1999, California’s low cost insurance program helps provide liability insurance for low income families that have a good driving record. The car insurance coverage limits set by the CLCA are going to be lower than the minimum requirements for California. So drivers that are in the program are okay not meeting the minimum requirements for a state.
Annual premiums will vary depending on your location. This can range from $256 to $611. If there is a single male driver who is between 19-24 in your household, his cost of insurance will be 25% higher than the basic rate. This is because they are considered high risk drivers.
The CLCA requires that all the vehicles in a household have to be insured by the CLCA. If you are looking for discounts, they do offer a good driver discount, if you have a good record for the past 3 years.
People who qualify for this program are allotted two policies, which mean that they can insure up to two cars. So if there are two drivers in the same household that are both qualified for CLCA, they each can have two policies for a total of four cars in the household.
In order to qualify for CLCA, you have to meet specific requirements. You have to have an income limit based on your house size.
|Household size||Maximum household income|
You also have to have a valid California driver’s license, and own a vehicle that is worth less than 25,000.
California low-cost auto insurance policy provides low income families with the following coverage limits:
- $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 liability
For additional fees, drivers can add the following to their insurance:
- $1,000 medical payments per person
- $10,000 uninsured motorist bodily injury liability per person
- $20,000 uninsured motorist bodily injury liability per accident
This program does not offer collision or comprehensive coverage, but it can be purchased anywhere else.
Special Automobile Insurance Policy – New Jersey (SAIP)
New Jersey offers low income car insurance, but the program only covers medical. In order to receive SAIP you have to be currently enrolled in Medicaid with hospitalization and valid driver’s license to qualify suspended or revoked licenses will not qualify.
If you get into an accident, SAIP will cover any medical fees after a car accident for up to $250,000. If the accident does turn fatal, it will provide a $10,000 death benefit.
Unfortunately, SAIP does not provide you with any liability auto insurance coverage, collision and comprehensive, or other medical costs that medicaid will cover like doctor visits.
If everyone in a household is enrolled in Medicaid and they share a single car, can all be covered by the same policy. If there are multiple cars, each car will have to have its own policy. If other members in your household do not have Medicaid, they do not qualify for a SAIP policy. They would have to find another auto insurance somewhere else.
A special automobile insurance policy can be obtained at some insurance agencies. You can call the Personal Automobile Insurance Plan (PAIP) customer service line (800) 652-2471 or search online. As of 2018, SAIP premiums cost $360 per year if you pay for the year. If you pay two times a year it will cost $365
Hawaii’s Low-Cost Disability Auto Insurance Program
Hawaii has a program for residents who get financial help from states Assistance to the Aged, Blind and Disabled or AABD. The program provides money for food, clothing, shelter and other essentials.
- To be eligible for AABD, you must be one of the following:
- 65 or older
- legally blind
- totally and permanently disabled
- living with and taking care of someone who receives AABD financial assistance
- You must also have a countable income below 34 percent of the current Federal Poverty Level
Auto insurance under AABD is free of charge.
Low Income Car Insurance FAQs
Can lower-income households qualify for car insurance discounts?
There are many discounts that all drivers can qualify for on their car insurance policy. Discounts for good drivers, reduced mileage, and safety features. No matter what your financial situation is, driving habits and safety features of your car may knock some dollars off of your premium.
How can I apply for low income car insurance?
Only drivers in California, Hawaii, and New Jersey can apply for state government public auto insurance. However, you can save on auto insurance, if you compare quotes and buy your insurance online.
Should I compare car insurance quotes online?
All drivers should take some time and visit a secure auto insurance quotes comparison site like Lowered Rates. They can deliver real auto insurance quotes quickly, in minutes, and help you save by finding an insurance provider that fits your needs.
What are the income limits for low-income car insurance in California?
The limits will depend on the size of your household.
- single-person household, you must earn $30,350 or below
- two-person household, you must earn $41,150 or below
- three-person household, you must earn $51,950 or below
- four-person household, you must earn $62,750 or below
- five-person household, you must earn $73,550 or below
- six-person household, you must earn $84,350 or below