The average driver in New Jersey pays $1,757 per year for full coverage car insurance, making it one of the more expensive states to purchase a policy. While there is a more affordable option than traditional auto insurance for some New Jersey drivers to consider — dollar-a-day insurance — this low-cost insurance alternative does have limitations.


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The Special Automobile Insurance Policy (SAIP)

New Jersey’s dollar-a-day insurance, or the Special Automobile Insurance Policy (SAIP), is a state-run program that offers low-cost car insurance to New Jersey drivers who have Medicaid with hospitalization benefits. SAIP policies are commonly referred to as “dollar-a-day insurance” because the policies cost about $1 per day.

Dollar-a-day insurance is cheaper than traditional car insurance through a private insurer, but SAIP policies offer limited coverage and don’t meet New Jersey’s minimum car insurance requirements. Here is what’s included in a SAIP policy:

  • Emergency medical treatment: Covers medical expenses if you get into an accident and need emergency treatment.
  • Brain and spinal cord treatment: Offers coverage up to $250,000 if you get into an accident and need treatment for a brain or spinal cord injury.
  • Death benefit: Includes a death benefit of $10,000 paid to your loved ones if you pass away in an accident.

This type of insurance does not include collision or comprehensive insurance, which covers damage to your vehicle. More importantly, it does not include liability coverage, which means if you cause an accident and damage someone else’s vehicle or property, you are responsible for paying for the repairs out of pocket.

Cost of dollar-a-day car insurance in New Jersey

SAIP insurance costs $365 per year, payable in biannual or annual installments. If paid annually, it lowers the cost to $360. There is no monthly payment option like traditional car insurance.

Keep in mind that only one car is eligible for coverage on a SAIP policy, although multiple people can be covered on a single policy. For example, if you and your partner both qualify for SAIP insurance and you each have a car, you would need to purchase two separate policies, which would double the cost. However, you could both be covered on the same policy if you share a single car.

Unlike traditional car insurance, there are no discounts for dollar-a-day insurance. Despite the Medicaid requirements, there are also no subsidization options for dollar-a-day car insurance. However, your rate won’t increase or decrease due to your ZIP code, age or the type of car you drive.

How dollar-a-day car insurance compares to standard auto insurance

The SAIP program is significantly less than the average cost of standard minimum insurance policies in New Jersey or full coverage policies which are $847 per year and $1,757 per year, respectively. Although the cost difference is large, these standard policies offer greater financial protection than the SAIP, which could cost a driver more in the long run.

SAIP insurance leaves drivers financially vulnerable by not covering many incidents a standard policy would provide coverage for. New Jersey requires that drivers who purchase insurance to carry at least the minimum insurance amounts set by the state, but offers two different options. The basic policy provides property damage liability and personal injury protection. The standard policy includes both of these, plus bodily injury liability.

  • Bodily injury liability: This liability coverage covers medical expenses if there are injuries to another driver due to an accident you have caused.
  • Property damage liability: Property damage liability covers expenses related to property damage to another driver’s vehicle if you are named the at-fault driver in an accident.
  • Personal injury protection: Personal injury protection, or PIP, provides coverage for expenses related to medical treatment and lost wages for both you and your passengers following a covered accident. This coverage pays out no matter which driver is ruled at fault.
  • Uninsured/underinsured motorist coverage: Uninsured motorist coverage pays for expenses related to an accident when another at-fault driver does not have insurance. Underinsured coverage covers you when an at-fault driver does not have high enough insurance limits to pay for damages and injuries caused to you.

Cheaper standard options for car insurance are available to drivers in New Jersey for those willing to do a little extra homework. Lower car insurance premiums are often possible when you shop around and compare multiple carriers. This method allows you to not only clearly see which insurance providers offer the lowest rates, but also learn which carriers offer more discounts.

Who should get dollar-a-day insurance

SAIP car insurance is designed for people enrolled in Medicaid with hospitalization who can’t afford a standard car insurance policy. New Jersey drivers who qualify should consider dollar-a-day car insurance as a last resort since these policies are meant to keep low-income drivers from driving uninsured, which is illegal and dangerous.

Before opting to purchase dollar-a-day insurance, it’s a good idea to shop around for other cheap car insurance options. While standard car insurance will likely be more expensive than SAIP insurance, the coverage is significantly more robust. Drivers may be able to find cheaper options by leveraging discounts and strategically choosing coverage options.

Another option to consider is the New Jersey Personal Automobile Insurance Plan (NJ PAIP), which meets the state minimum coverage requirements. The NJ PAIP is open to high-risk New Jersey drivers who don’t qualify for traditional car insurance. This insurance can be expensive, but can provide a good option for drivers struggling to find coverage.

How to get dollar-a-day insurance in New Jersey

To qualify for dollar-a-day insurance in New Jersey, you must meet certain eligibility requirements, including:

  • Be actively enrolled in Federal Medicaid with hospitalization.
  • Have a valid New Jersey driver’s license and registered vehicle.
  • Not have an existing auto insurance policy.

If you lose your Medicaid benefits, your SAIP car insurance will remain active with limited benefits until the renewal period, at which point you’ll need to find another policy. Additionally, drivers with suspended or revoked licenses or who have a car registration in bad standing are not eligible.

Drivers that meet eligibility criteria can apply for coverage at most insurance agencies in New Jersey. The SAIP website provides assistance for finding a provider, which is available online or at 1-800-652-2471.

Applicants will be asked to provide their driver’s license, car registration and Medicaid identification card, as well as the licenses of anyone in their household who also qualifies for Medicaid and drives the insured vehicle.

Frequently asked questions

Who is eligible for dollar-a-day insurance?

Not all New Jersey drivers qualify for dollar-a-day insurance. Applicants must be enrolled in Federal Medicaid with hospitalization benefits. Those who qualify for Medicaid, but aren’t enrolled, won’t be eligible for SAIP insurance. Additionally, drivers must have a valid New Jersey driver’s license and registration in good standing.

Can I get SAIP insurance with a low credit score?

Yes. The state doesn’t look at the credit scores of SAIP applicants like a normal insurance company does. Assuming other eligibility requirements are met, drivers can get approved for coverage even with a low credit score. Conversely, a good credit score won’t ensure a lower rate.

What does dollar-a-day car insurance cover?

Dollar-a-day car insurance covers emergency medical treatment and brain and spinal cord injury treatment immediately after an accident. It also includes a death benefit of $10,000 for family members when the insured dies in a car crash. Dollar-a-day insurance does not include collision, comprehensive or liability coverage.

Does dollar-a-day insurance really cost a dollar a day?

The NJ SAIP insurance does cost about one dollar per day for coverage — $365 for the whole year. It’s designed to offer an affordable option for drivers who can not afford a full coverage policy. A driver must be enrolled in Medicaid to be eligible for this insurance option.