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Guide to low-income car insurance

Updated Nov 22, 2022
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You are required to have at least a minimum amount of car insurance when you get behind the wheel in almost every state. However, it isn’t always easy to find an affordable car insurance policy, especially if you’re on a tight budget or have a low income. After all, the average cost of car insurance in the U.S. is $545 per year for minimum coverage and $1,771 per year for full coverage, and depending on a number of other factors, like your ZIP code and driving history, a policy could be higher or lower than average.

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Insurance Disclosure, LLC is a licensed insurance producer (NPN: 19966249). services are only available in states where it is licensed. may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.

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 $354
Erie $476
Geico $365
Auto-Owners $325
Amica $444

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

State-sponsored options for low-income families

To date, four states have developed low-income car insurance programs: California, Hawaii, Maryland and New Jersey. These programs differ from each other. Here are the details you need to know for each one:


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, you must be 16 or over, 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 up to $250,000 if you get into an accident. It doesn’t include coverage for liability or vehicle damages, but does include a death benefit.

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 receive 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, or have had vehicle insurance canceled or not renewed 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, which includes $20,000/$40,000 bodily injury, $15,000 property damage, and $2,500 economic loss coverage.

Who should get low-income car insurance?

The definition of “low income” varies from state to state. In many cases, low income is determined by a percentage of the federal poverty levels, which are decided at a national level and used to determine eligibility for Medicaid and other programs. Qualifications for low-income car insurance are also determined on a state-by-state basis. For example, in Hawaii, only drivers who are older than 65 and meet other qualifications can qualify for the state’s low-income car insurance program.

Low-income car insurance can be a lifesaver for people who qualify and can’t afford private coverage. However, it is not the best option for everyone. That’s because 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), but 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. Other factors that may play a role include the make, model and age of your car, your driving record and other personal factors.

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 may pay more money for their car insurance, depending on the state they live in, 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


Bankrate utilizes Quadrant Information Services to analyze 2022 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. 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 coverage that meets each state’s requirements. Our base profile drivers own a 2020 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

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

Edited by Insurance Editor