The average driver in New Jersey pays $1,350.28 per year for car insurance, making it the fourth most expensive state. While there is a more affordable option than traditional auto insurance for New Jersey drivers to consider—dollar-a-day insurance—this alternative does have limitations.
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 very little 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 care.
- 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. 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.
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.
Who should get dollar-a-day insurance
The only drivers who need SAIP car insurance are people who can’t afford a standard car insurance policy, so New Jersey drivers should consider dollar-a-day car insurance as a last resort. These policies are meant to keep low-income people 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 be more expensive than SAIP insurance, the coverage is significantly better. Drivers may be able to find cheaper options by leveraging discounts and strategically choosing coverage options.
Another option to consider is a policy through 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:
- Must be actively enrolled in Federal Medicaid with hospitalization.
- Must have a valid New Jersey driver’s license and registered vehicle.
- Don’t have an existing auto insurance policy.
If you lose your Medicaid benefits, your SAIP car insurance will remain active until the renewal period, at which point you’ll need to find another policy. Additionally, drivers with suspended or revoked licenses or 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. Assistance for finding a provider is also 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 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.