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Affording Auto Insurance: Government Help Available In Some Areas

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While auto insurance is required by law in most states, not everyone can afford to pay the premiums. For low-income households, auto insurance can take a big bite out of the monthly budget. While some states are considering programs to help low-income drivers meet the cost, other states already have government programs in place or offer subsidies to help you pay for auto insurance. Therefore, if you fall within the category of drivers who can't afford auto insurance, there may be help available.

State-Run Auto Insurance Programs

Although there are no federal auto insurance programs, some states offer auto insurance programs at lower cost, but the programs available vary from state to state. The eligibility requirements to qualify also differ by state.

California's Low Cost Automobile Insurance Program (CLCA)

If you live in California, the income requirement for CLCA is based on the number of people in your household. Insurance premiums vary by county, but to be eligible, you must have a current driver's license and be at least 19 years old. The vehicle you insure must be valued at no more than $25,000. While the program does not provide comprehensive or collision coverage, it provides the basic liability coverage the state requires by law.

New Jersey's Special Automobile Insurance Policy (SAIP)

New Jersey is another state that offers a special auto insurance program for drivers with low incomes. The state's SAIP provides medical coverage if you are injured in an automobile accident. While the program also offers a $10,000 death benefit, it does not provide coverage for vehicles or property, even if you were not the party at fault. You must be a Medicaid recipient – with hospitalization coverage – to qualify for the program.

Hawaii's State Program

In Hawaii you can contact the Insurance Division of the Department of Commerce and Consumer Affairs (DCCA) if you can't afford to pay for no-fault auto insurance coverage. You may qualify for help through the state if you receive Supplemental Security Income (SSI) or some other form of public assistance, such as food vouchers, medical assistance, or cash payments.

Auto Insurance Subsidies

Some states and local governments offer auto insurance subsidies that provide help paying toward the expense of auto insurance. Depending on where you live, one program may pay money directly to the insurance company, whereas another program may issue you a check to reimburse you some portion of the money you pay for auto insurance premiums.

Eligibility Requirements Other Than Income

Keep in mind that even if you qualify financially for a government auto insurance program for low-income households, you may not be able to benefit from the program. These special policies generally require that you have a good driving record. Most programs also require that your vehicle be worth only a certain amount and/or that you not owe any money on its financing. In some states, you must be receiving some other form of state or county assistance intended for low-income families to qualify.

Where to Get Information

If you need help paying for auto insurance, visit the insurance website for your state to find out if some form of financial assistance is available in your area. Local human services agencies and organizations may be able to give you information regarding low-cost auto insurance options as well. You could also contact a company like Easy Insurance Group to see what information they can provide you with.