(Updated on October 28, 2019)
Despite what you hear in the news about the United States economy getting better, there are still millions of Americans who are living paycheck-to-paycheck. Low-income families simply cannot afford to spare an extra $20 per month, let alone an extra $100 or $200 per month on car insurance.
Many of these families don’t realize that cheaper car insurance programs exist in the United States. These programs may not be advertised all that well, but you can learn more about them by researching them on your own.
Car insurance companies do not specifically ask you for your annual income information when you apply for insurance. In fact, your income does not determine how much your monthly premium rates are going to be. Insurance companies look at other things, such as your zip code, driving history, homeowner status, education, and credit score.
However, low-income families are generally in zip codes with higher crime rates. As a result, their insurance companies tend to charge them a higher monthly premium because the risk of vandalism and theft is those areas are greater.
Top 3 Cheapest Car Insurance Programs
Some of the biggest car insurance companies serve all 50 states while others may only serve specific regions of the country. There are also independent car insurance companies which may only serve one or two states. Don’t overlook the smaller car insurance companies because they tend to offer good deals on their insurance plans in order to attract more customers.
On the other hand, you may be in a situation where no car insurance company will give you coverage. For instance, if you have a bad driving record and you live in a zip code with a high crime rate, then you’ll likely be denied coverage altogether. Unless you can afford to move to a safer zip code, there isn’t much you’ll be able to do about it.
Fortunately, there are various state and federal government programs available to help low-income families and individuals obtain affordable car insurance coverage. Below are the 3 cheapest car insurance programs for low-income families in the United States. If you qualify for one of these programs, then you’ll no longer need to stay uninsured.
1) Low-Cost Disability Auto Insurance Program in Hawaii
The state of Hawaii has its own “Low-Cost Disability Auto Insurance Program” which is available to its poor residents. These are people who’ve been officially declared disabled by the Social Security Administration and have an income which is under 34% of the total Federal Poverty Level. They must also have no more than $2,000 to their name.
2) Special Automobile Insurance Policy in New Jersey
The Special Automobile Insurance Policy is available to low-income individuals and families in New Jersey. Unfortunately, this policy doesn’t cover liability, collision, or comprehensive costs. It only covers the emergency medical costs that you’ll incur as a result of a car accident.
It also pays up to $250,000 for treating severe brain and spinal cord injuries which result from the accident. If you’re a New Jersey resident, have an active driver’s license, and signed up for Medicaid w/ Hospitalization, then you’ll qualify for this program.
- Top 7 Best Car Insurance Companies for Bad Credit in US
- Top 4 Best Car Insurance Companies for Rental Cars in United States
- Top 5 Best Car Insurance Companies for a New Driver in US
3) Low-Cost Auto Insurance in California
If you’re a low-income family in California with good driving records, then you’ll qualify for the state’s Low-Cost Auto Insurance program. This gives you liability coverage on your vehicle, although it is very limited compared to the basic coverage requirements of the state.
To qualify, you must have a good driving history, be 19 years of age or older, have a valid driver’s license, and own a vehicle which is worth under $20,000 without any loans owed.