Where can I find a list of car insurance for low income families?
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UPDATED: Oct 18, 2021
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When money is really tight, sometimes it’s hard to afford car insurance. But most people need a car in order to get to work, which means they need to have car insurance. Some states have set up programs to help low-income drivers and their families afford car insurance.
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However, not all states have a low-income program for car insurance. If not, then you’ll need to shop around for insurers that offer cheap car insurance so that you’re not spending a good chunk of your annual income on just car insurance. Though it may seem daunting to have to compare services to find the best rate, there are ways in which you can get assistance. Plus, it’ll be a literal payoff if you’re able to find affordable premiums.
Do low income car insurance programs vary based on state?
All states require that drivers assume responsibility to pay for any damages, either to other vehicles or other drivers that they cause during an accident. All but one of the states requires that be done by buying a certain amount of liability insurance. Some states also require uninsured motorist coverage and some sort of medical coverage.
That cost can be substantial, especially in certain parts of the country. Therefore, some states have established programs to help good drivers who meet income requirements to afford a valid level of coverage.
Check with the department of insurance in your state to see if your state has such a program.
For example, California has such a program that can provide car insurance for as low as $400 per year. You must have a good driving record, have had a driver’s license for at least three years, be at least nineteen, and have a car worth less than $20,000. You must also meet the income requirements.
People with clean driving records and decent credit scores may have an even easier time of finding an insurance company willing to work with them, but programs usually exist specifically for income level coverage hunting. So make sure you explain this when you’re in the process of applying.
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Are there any problems with low income programs?
While $400 per year sounds great for car insurance, remember that there are some drawbacks. These programs usually only provide the minimum coverage you need to drive legally in your state. This may not include collision coverage or comprehensive coverage, depending on what your state declares is necessary. However, this might not be enough insurance to protect you financially. If you total someone’s $40,000 car and only carry $20,000 in liability, then they might sue for the remainder.
Also, remember that this policy doesn’t usually carry optional coverage like medical payments, personal injury protection, or comprehensive and collision as stated above. If you have a car loan, you’ll be required to have comp and collision. You’ll need to add that to the policy which will increase the cost of the premium. While this may be affordable car insurance for some, purchasing these coverage levels may not be manageable for low-income individuals.
In California, there’s also a surcharge added to premiums for men under the age of twenty five. This is because men in this age range are at the highest risk of being in a car accident. So make sure you read all of the fine print about these programs before signing up for these financial assistance programs. They may not save you that much in the long run.
High-risk drivers are going to have to look elsewhere for cheap auto coverage, since a poor driving record isn’t going to make the cut for these programs.
What are some other ways to save money and get affordable rates?
For those who live in states that don’t have a low-income car insurance program, there are still many ways you can cut the costs of your car insurance. By spending some time calling around or searching online combined with some smart shopping skills, anyone can find affordable coverage. There are a few other ways to get cheaper rates without focusing on income requirement based programs.
If you can scrape the money together in any way possible, pay for six-month auto insurance policies in advance. Most insurance companies give a significant discount if the premium is paid in full rather than spaced out monthly. Then each month for the next six months, set aside one-sixth of the premium, so that in six months, when the next premium is due, you’ll have the money ready to pay.
Also, ask about other discounts. Don’t assume that the company is giving you every discount you are eligible for. Sometimes auto insurance companies won’t even mention more common discounts until you ask about it. You might be eligible for multi-car discounts if you own more than one car all insured on the same policy.
If you use public transit and don’t use your car for regular commuting, be sure to tell them that as well. There are also discounts available if you mention your driving history, and whether or not you’ve taken defensive driving courses before. Your provider may also run your credit history, and as long as you don’t have poor credit, there may be some possibilities for saving money there as well.
If you are a student or have one on the auto policy who makes good grades, a good student discount can help lower rates as well. Also, try to get your car insurance and homeowners or renters insurance from the same company. Doing this will save you money on both types of policies. Also, ask for a good driver discount if it’s been at least three years since your last ticket or accident. Practice safe driving habits – safe drivers are going to come out on top financially no matter the situation.
One of the best things you can do to save money is to shop around.
Not all companies charge the same annual costs for the same cars or for the same people. By getting quotes from different companies, low-income families will have a better shot at finding a lower annual premium on the coverage they need, no matter their household size.
For more tips on saving money and getting affordable insurance, watch this podcast from the Insurance Information Institute.
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