Car Insurance That is Income-Based
Only California, Hawaii, and New Jersey offer car insurance that is income-based. Your income typically isn't a factor that's considered when car insurance companies determine your rates. Even if you don’t live in one of the three states that offer auto insurance that is income-based, you can still save money by lowering your coverage and taking advantage of discounts.
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UPDATED: Nov 19, 2021
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- Only California, Hawaii, and New Jersey offer income-based auto insurance
- Income does not usually factor into your car insurance rates, and low-income drivers pay the same rates as other drivers
- Drivers can save money on car insurance by lowering coverage levels and adding car insurance discounts
Car insurance is expensive. Unfortunately, how much money you make doesn’t affect rates.
In fact, you can only find car insurance that is income-based in three states. However, coverage is very limited, and you have to meet certain qualifications.
Even though you can’t buy car insurance that is income-based in most states, you can still find cheap coverage by shopping around. Compare multiple companies to find your best deal.
Keep reading to learn more about low-income car insurance. Enter your ZIP code to compare low-cost auto insurance quotes from insurance companies in your area for free.
Where can drivers find income-based car insurance?
Drivers can only find affordable car insurance that is income-based in California, Hawaii, and New Jersey.
In other states, your income doesn’t affect your car insurance rates. In fact, there aren’t any companies offering income-based car insurance.
Most states require at least a minimum amount of liability car insurance, but many drivers choose to carry more than just the minimum coverage.
However, adding additional coverages increase your auto insurance rates.
This table shows the average car insurance rates from top companies based on coverage type.
|Company||Average Annual Rate for Low Coverage||Average Annual Rate for Medium Coverage||Average Annual Rate for High Coverage|
Lowering car insurance coverage will reduce rates, but you will have to pay more if your vehicle is damaged.
Some drivers live in states that offer government auto insurance for low-income drivers. However, there are only three states where government car insurance is available.
What income-based car insurance does California offer?
The California Low-Cost Automobile (CLCA) insurance program is available to drivers within 250% of the poverty line.
To qualify for this liability-only coverage drivers must also own a car worth less than $25,000 and have a good driving record.
Although this program can provide car insurance for low-income single mothers and other low-income drivers, coverage amounts are low and may not fill all of your needs.
Also, please note that that rates for car insurance that is income-based in California vary based on the household income.
What government car insurance does Hawaii offer?
Hawaii only offers free auto insurance to disabled or older drivers as part of the state’s Assistance to the Aged, Blind, and Disabled (AABD) program.
To qualify for free car insurance, drivers must be over age 65, be totally and permanently disabled, be legally blind, or live with and take care of someone who qualifies.
With this program, low-income auto insurance for seniors is available if they have income 34% below the federal poverty level.
What is the New Jersey low-income car insurance program?
New Jersey offers low-income car insurance with medical-only coverage through the Special Automobile Insurance Policy (SAIP) program. Drivers must be enrolled in federal Medicaid with hospitalization and have a valid driver’s license.
While it does not meet the New Jersey minimum requirements for car insurance, drivers who participate in the program receive at least minimal medical coverage.
There is no need to get quotes for car insurance that is income-based in New Jersey. The coverage is just $1 a day.
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How can low-income drivers save money on car insurance?
One of the best ways to save money on car insurance is to take advantage of car insurance discounts.
Car insurance companies offer many discounts based on your driving record, policy type, and safety features on your car.
This table shows you common car insurance discounts from some of the top companies. Bundle your available discounts to save even more.
|Auto Insurance Discounts||Allstate (%)||American Family (%)||Farmers (%)||GEICO (%)||Liberty Mutual (%)||Nationwide (%)||Progressive (%)||State Farm (%)||Travelers (%)||USAA (%)|
|Adaptive Cruise Control||N/A||N/A||N/A||N/A||5||✗||✗||N/A||N/A||N/A|
|Daytime Running Lights||✗||✗||✗||1||5||5||✗||N/A||✗||✗|
|Electronic Stability Control||✗||✗||✗||N/A||5||✗||✗||N/A||N/A||N/A|
|Forward Collision Warning||N/A||N/A||N/A||N/A||5||✗||✗||N/A||N/A||N/A|
|Lane Departure Warning||N/A||N/A||N/A||N/A||✗||✗||✗||N/A||N/A||N/A|
|New Customer/New Plan||N/A||N/A||N/A||N/A||✗||N/A||N/A||N/A||N/A||N/A|
|Seat Belt Use||N/A||N/A||N/A||15||N/A||N/A||N/A||N/A||N/A||N/A|
|Students & Alumni||N/A||✗||N/A||✗||10||7||N/A||N/A||N/A||N/A|
You can also find cheap car insurance and compare rates online to find the best deal for you.
The best low-income car insurance will offer you multiple ways to keep your rates low. The one thing you don’t want to do is let your car insurance lapse.
According to the Insurance Information Institute, drivers without insurance face fines, driver’s license suspension, jail time, and can have their car impounded.
Finding the cheapest car insurance out there can save you money and the risk of driving without insurance.
Car Insurance that is Income-Based: The Bottom Line
Most drivers don’t live in a place with low-income auto insurance. However, there are ways to save.
Consider lowering coverage levels and adding discounts to get cheap car insurance rates. Find affordable car insurance for low-income drivers by shopping around.
The best low-income car insurance varies by driver.
Now that you know about income-based car insurance enter your ZIP code to compare free quotes from companies near you today.