Skip to Main Content

Guide to low-income car insurance

Younger gentleman driving a car; the perspective is from outside the car looking in at him through the windshield.
Westend61/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . This content is powered by (NPN: 8781838). For more information, please see our

Car insurance is legally required in most states, but it’s a major financial strain for many Americans. The annual cost of car insurance in the United States is $563 per year for minimum coverage and $1,738 for full coverage.

Although the price of car insurance varies significantly by state, it is not cheap. Low-income individuals who can’t afford car insurance are more likely to forego insurance coverage altogether, which can land them in serious trouble.

However, low-income individuals who struggle to pay for standard insurance have another option—enroll in a low-income auto insurance program.

What is low-income car insurance?

Low-income car insurance is a type of insurance that is available exclusively to low-income families. It allows people who can’t afford standard car insurance to get coverage that is less expensive. Ultimately, the goal of low-income car insurance is to reduce the number of uninsured drivers on the road.

Low-income car insurance is offered at the state-level, but it’s not widely available. There are only a handful of states that offer this type of insurance. Each state has its own requirements for low-income car insurance, and not everyone is approved for coverage.

Typically, you’re considered low-income if you make under a certain amount of money, and are enrolled in one or more government assistance programs. You also have to have a valid driver’s license in your state of residence, and have a clean driving record. Many states also have requirements for the value of your vehicle.

Low-income car insurance is considered to be a last-resort option for drivers. You should only apply for low-income car insurance if you’re unable to find private insurance that you can afford. Although low-income car insurance is cheaper, it doesn’t offer as much coverage.

Cheapest car insurance for low-income individuals

Several insurance companies offer affordable prices. Individuals with a low income may want to consider obtaining minimum coverage from one of the top cheap car insurance companies as shown in the table below. Minimum coverage is more affordable than full coverage and can be one way to save, although people considering this option may want to discuss if that will be enough coverage with an insurance agent.

Car insurance company Average annual premium for minimum coverage
USAA $351
Erie $360
Geico $363
Auto-Owners $364
Amica $368

Along with minimum coverage, you can add additional features to customize your coverage options.

State-sponsored options for low-income families

Currently, only four states offer a low-income car insurance option—California, New Jersey, Maryland and Hawaii. Here are the eligibility requirements for the three plans.


Low-income drivers in California can sign up for the California Low-Cost Automobile program (CLCA).

To qualify, your annual income must fall within 250 percent of the federal poverty level. You must have a valid California driver’s license, your car must be worth less than $25,000 and you need to have a clean driving record.

The CLCA program only offers liability and property damage coverage. Uninsured motorist and medical payments coverage is optional.

New Jersey

New Jersey’s low-income car insurance program is called the Special Automobile Insurance Policy (SAIP). Besides a valid New Jersey license, the only requirement is that drivers must be enrolled in federal medicaid with hospitalization.

Unlike other plans, this one just covers emergency medical costs if you get into an accident. It doesn’t include coverage for liability or vehicle damages.

Insurance from SAIP costs only $365 a year, which is significantly cheaper than private insurance.


Low-income drivers in Hawaii can get affordable coverage through the Assistance to the Aged, Blind and Disabled program (AABD).

This program is only available to Hawaii residents who are 65 or older and meet the Social Security Administration’s legal definition of disabled or blind. Additionally, your income must fall below 34 percent of the 2006 federal poverty level, and you can’t be receiving aid that exceeds $2,000 for one person or $3,000 for a couple.


Maryland’s automobile insurance fund, also called Maryland Auto Insurance, sells vehicle liability insurance to drivers residing in Maryland who cannot obtain private liability coverage. The Fund acts similarly to any private insurance company and must follow regulations by the Maryland Insurance Commissioner. The fund also covers certain claims with uninsured motorists or in the event of a hit-and-run.

Drivers must be rejected by a minimum of two private insurance companies, had vehicle insurance cancelled, or not renewed vehicle insurance for reasons excluding nonpayment in order to be eligible. To register a vehicle in Maryland, the owner of the vehicle must follow the minimum state requirements for coverage.

Who should get low-income car insurance?

Low-income car insurance can be a lifesaver for people who can’t afford private coverage. However, it is not the best option for everyone, and not everyone is eligible.

Low-income car insurance is for those who cannot afford any type of private insurance, even with discounts.

However, low-income car insurance coverage is limited. It is not the same insurance you would get through a private provider. Most state-sponsored insurance programs offer minimal coverage to keep the price low. For instance, California drivers in the CLCA program only get liability and property damage coverage.

Low-income car insurance is a good option if you need coverage to avoid driving completely uninsured (which is illegal). It is generally not a good option for anyone who is looking for comprehensive coverage. Low-income car insurance often has significant gaps that could lead to out-of-pocket expenses if you have to file a claim.

How income affects car insurance rates

Technically, your income does not impact your 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.

However, many of those factors relate to your income level. For example, if you have a low credit score, it could be because you have debts you cannot afford to pay because of your income. People with a low credit score pay more money for their car insurance because they are considered high-risk.

Additionally, people with a low income might live in a neighborhood with a higher rate of crime. Individuals who live in ZIP codes with above-average rates of crime and theft tend to have higher insurance premiums.

Frequently asked questions

Who has the cheapest car insurance?

The cheapest car insurance companies vary by state. Additionally, every driver pays a different rate based on their zip code, age, credit score, claims history, the car they drive, and so on. Based on our own research, Geico, Nationwide and State Farm tend to offer consistently affordable premiums.

What are ways to save on car insurance?

There are a number of ways drivers can save money on car insurance. Take advantage of discounts, raise your credit score, increase your deductible, take a defensive driving course and shop around for quotes to make sure you’re paying the lowest rate.


Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.

Rates are determined based on 2020 Quadrant Information Services data.

Written by
Elizabeth Rivelli
Insurance Contributor
Elizabeth Rivelli is a contributing insurance writer for Bankrate and has years of experience writing for insurance domains such as The Simple Dollar, and NextAdvisor, among others