How to Get Help Paying for Car Insurance
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UPDATED: Oct 19, 2021
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- Nearly all US states require drivers to purchase car insurance to drive legally. Uninsured drivers risk facing severe penalties
- The average consumer pays $841 every year for car insurance
- Auto insurance providers don’t provide assistance for low-income earners, but there are other ways to bring down car insurance costs
- Depending on which state you come from, you can enroll for a government sponsored car insurance program if you are a low-income earner
- Government sponsored car insurance programs don’t offer the best policies around, but they can help low-income households avoid the repercussions of driving without car insurance
Car insurance is a legal requirement in all US states, except new Hampshire — drivers are however required to provide proof showing that they can foot the bill if they cause an accident.
With the constantly rising cost of living in the United States, it’s practically impossible to stretch your budget to cover something like car insurance on an annual income less than $40,000.
Data from the National Association of Insurance Commissioners (NAIC) shows that the average consumer pays $841 every year for car insurance.
Even if you have a low income, you can still find a policy that provides decent coverage — or at least better than none. Go online and compare quotes from different auto insurance providers can choose one that suits you. Enter your zip code above to compare right now.
You Shouldn’t Drive Without Insurance
Over the last few years, the average minimum wage has stagnated at around seven dollars per hour, that’s about $15,000 in annual income.
Conversely, auto insurance prices have been increasing at an annual rate of 10 percent.
Thanks to these harsh economic conditions, low-income families spend a whopping 30 percent of their earnings on car insurance, which leaves them with little to spare for their rent or mortgage payments, medication, groceries, and other necessities.
Despite the fact that driving without car insurance is illegal in most states, most low-income earners are often willing to risk facing the penalties and allow their coverage to lapse.
By foregoing expenses such as car insurance, these families can take care of other basic needs at home. However, if they are caught driving without necessary, they could have their license suspended or pay hefty fines.
Driving uninsured can lead to bigger out of pocket payments in the long run. The financial repercussions of driving without car insurance are even more severe if an accident occurs.
As an uninsured driver, you could be held liable and end up paying for property damages for the rest of your life.
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Car Insurance Options For Low-Income Earners
According to the NAIC, about one out of every eight drivers in the United States is not insured. In most cases, people fail to purchase car insurance due to financial reasons. It’s also important to note that car insurance must be provided to everyone, without exceptions, as it is required by law.
Auto insurers base their rates on factors such the following:
- credit history
Whether you are a high or low-income earner, if you are a high-risk customer, your rates will be high. There are no exceptions. The company can’t offer much help.
As a result, some states have come up with low-cost auto insurance programs to provide low-income households with coverage. These programs are aimed at reducing the number of uninsured drivers on the roads.
Though government sponsored auto insurance coverage isn’t as good as a traditional policy, it provides people who can’t afford car insurance with an opportunity to drive legally.
A typical low-income driver car insurance program offers limited auto insurance coverage at a discounted rate. To enroll in the program, you have to meet the eligibility requirements.
As a low-income earner, your options — vis-à-vis car insurance — are limited. Nevertheless, you can always go online and compare quotes and see if you can find one that offers decent coverage at a rate that you can afford. Who knows what you can find?
US States Offering Low-Income Car Insurance Programs
Currently, low-cost auto insurance programs are available in three states. These are New Jersey, Hawaii, and California.
– New Jersey
The Special Automobile Insurance Policy (SAIP) provides financial assistance for low-income drivers in the state of New Jersey. The program pays for emergency treatment for any injuries resulting from car accidents not exceeding $250,000.
In the event of a fatality, the policy offers a death benefit of $10,000.
However, the program doesn’t pay for damages to your vehicle or provide liability for any property destroyed in the accident. To qualify for SAIP, you have to be a Medicaid beneficiary and have a valid NJ driver’s license. The program costs $360 if paid up front.
The state of Hawaii provides assistance to the disadvantaged in the society via the AABD (Aged, Blind and Disabled) program. AABD financial aid beneficiaries also get free car insurance as part of the assistance.
To enroll for AABD, you have to be blind, be mentally or physically disabled, have a terminal condition that keeps you from working or be 65 years or older. To get coverage through AABD free of charge, get in touch with the Hawaii Department of Human Services.
Residents of the Golden State can purchase cheap auto insurance program via the California Low-Cost Auto Insurance program. With the program, low-income drivers can now drive legally at an annual cost of as little as $241.
A policy purchased via the California Low-Cost Auto Insurance program won’t pay for damages to your car.
Medical payments and uninsured motorist bodily injury protection coverage options are also available.
To qualify for the program, you have to meet certain income requirements, own a car worth less than $25,000, have a valid driver’s license (California), and be at least 19 years old.
Assess Your Options
Government sponsored auto insurance programs are an excellent alternative, but they are limited and not all low-income drivers meet the eligibility requirements. It’s possible to purchase a standard car insurance policy and focus on reducing costs using other methods.
You can drop unnecessary coverage, take advantage of discounts, and be a safe driver. Compare multiple quotes to make sure that you get the most affordable policy. Enter your zip code into our free comparison tool to get started.