Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: May 29, 2019

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Car insurance is a fact of life if you own a car and want to drive legally. Minimum amounts of auto insurance coverage are required in 47 states, regardless of your income level.

However, several states now have low income auto insurance programs to ensure an opportunity to buy insurance, even for their low income citizens. Most insurance programs for low-come customers have specific eligibility requirements.

In addition to state programs for low income insurance, you may also be able to find low-cost insurance that fits within your budget if you know the right questions to ask and where to look.

For a fast rate quote, enter your ZIP code into the FREE rate comparison tool!

State Low Income Car Insurance Programs

Several states have instituted state-sponsored low-income auto insurance programs.

As a result of government and insurance industry reports that indicate many drivers do not carry insurance because of the cost, state governments are quickly reaching the conclusion that they must provide an affordable option for individuals without the adequate funds to purchase car insurance if there is a legal requirement for all drivers to carry a minimum amount of coverage.

California: California’s low income car insurance program has been in place since 1999, when it was established by the California legislature. It provides liability and medical payment insurance at low cost to individuals who meet eligibility requirements.

Collision and comprehensive auto insurance are not available through this program. Auto insurance policies are provided through private insurance companies approved by the state of California for this specific program.

Eligibility requirements for the California low income auto insurance program include income ceiling rates based on family size and the car to be insured must not be valued in excess of $20,000.

Additionally, the driver may not have more than one accident or citation for a moving violation in the past three years and all household vehicles must be insured through the low income program.

Maryland: Maryland also has a state-sponsored low income auto insurance program. Maryland’s program is structured as an independent insurance entity to provide auto insurance to individuals who are unable to obtain insurance through private insurance companies.

It was established in 1972 and reports directly to the Governor of Maryland and the legislature.

To qualify for this program, individuals must be denied auto insurance coverage by at least two private insurance companies. The Maryland low income auto insurance program also provides five different payment options to make paying for coverage as convenient as possible.

New Jersey: In New Jersey, the state-sponsored car insurance coverage program only provides medical automobile insurance for individuals who are enrolled in qualified Medicare programs.

The Special Automobile Insurance Policy (SAIP) program costs $360, which can be paid in a single full payment or two payments for an additional $5.

An SAIP policy can be purchased from the majority of insurance agencies in New Jersey. Additionally, it can be obtained from the New Jersey Personal Automobile Insurance Plan directly.

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Alternatives to State Car Insurance Programs

Many states do not have auto insurance programs specifically in place for people with low incomes. However, it is possible to purchase affordable minimum insurance coverage if you drive an older car and have a good driving record.

Most states only require liability auto insurance, although a number of states also require medical payment or no fault coverage.

Liability insurance can be purchased from all car insurance companies and agencies. States which require liability insurance have low levels of minimum coverage, although this level of insurance may not provide you with adequate coverage if you cause an accident.

However, liability auto insurance is often relatively inexpensive, particularly when compared with collision and comprehensive insurance. If at all possible, consider buying additional liability car insurance if you can afford it.

Medical payment or no fault insurance is auto insurance in addition to liability coverage.

Medical payment coverage is also called personal liability protection or PIP and can be applied to medical treatment, legal expenses, rehabilitation expenses and lost wages, regardless of who caused the accident.

Finding Low-cost Insurance

You can find low-cost car insurance from a number of sources. Insurance comparison websites allow you to receive insurance premium quotes from several different companies at the same time.

You may be asked to provide basic information regarding your car, contact information and decide what level of coverage you need.

Another source for information about inexpensive car insurance is independent insurance brokers.

In most cases, an independent broker will help you understand your insurance needs and can provide you with quotes from several insurance companies to provide you with the maximum amount of coverage at the lowest price.

Lowering Insurance Costs

Before buying car insurance, you can also lower your premium rates a number of ways. Ask about potential discounts available, such as good driver or senior driver discounts.

Other common discounts include lowered rates for also buying homeowners or rental insurance.

Rental insurance is extremely inexpensive and by spending a very small amount of money on a rental policy, you may be able to save hundreds of dollars on your car insurance.

You can also save money if you are able to pay your premium in a single payment or by arranging automatic payments with your credit card or bank account.

Car insurance does not have to be expensive. Although several states offer state-sponsored insurance programs, they have stringent eligibility requirements. By asking about potential discounts and comparing rates, you may be able to find affordable car insurance from private insurance companies.

Before buying any car insurance policy, compare premium rates from at least three different sources to make sure you are getting the best rate and coverage for your money.

For an immediate rate quote, fill out the form for a free comparison rate tool.

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