Do You Qualify For Low-Income Auto Insurance?
When you’re planning to pay off debt, save for the future, or improve your credit score, you likely have a set budget, based on your income and goals. But when push comes to shove, you might look for ways to cut expenses so you have more wiggle room to reach your goals on a limited income.
In the case of car insurance, it can be an expensive necessity in the budget that feels like a huge obstacle to financial freedom. A few states actually offer special car insurance for those who find it unaffordable. If you don’t qualify, there are ways to reduce this expense- without risking temporary cancellation of auto insurance just to make ends meet.
State-Sponsored Insurance Options
The United States currently has three states that provide subsidized insurance for low-income families: California, Hawaii, and New Jersey.
California has the California Low-Cost Automobile (CCLA) insurance program. For eligible applicants, it offers liability and uninsured motorist protection. Applicants must be within 250% of the federal poverty limit, have a good driving record, and own a vehicle valued at less than $25,000.
In Hawaii, there’s a service providing free auto insurance to those who are 65 years or older, have confirmed disabilities, and have an income below 34% of the federal poverty line.
New Jersey is the third state that features a policy that accommodates lower costs associated with automobile insurance. The Special Automobile Insurance Policy (SAIP) covers emergency medical costs in the event you are in an accident. It doesn’t, however, cover liability costs, or damage to your own vehicle. Technically, drivers who have this policy are considered “insured,” but because it provides such a small amount of coverage, it may not be the sufficient coverage you desire, even at the lower price point. The requirement to qualify for this insurance is simply that you are enrolled in Medicaid.
How Else Can You Cut Costs?
For the other 47 states, there are many ways drivers can reduce their auto insurance costs:
- Shop around for the cheapest rates. This takes a considerable amount of effort, but if you don’t take the time to compare multiple policies and their pricing, you could miss out on the lowest possible price. Even shopping around every so often, after you purchased coverage, can help you save in the long run. Continue to look for more savings and eligibility.
- Don’t own a car that is expensive to insure. The cheaper and older the vehicle, the less likely you’ll have to pay for comprehensive insurance. If you own a vehicle outright, you don’t have to worry about any stipulations from a finance contract that require comprehensive coverage, and liability coverage will be significantly lower.
- Don’t have too many vehicles to insure. Since a lot of auto insurance rates pertain to individual vehicles, you will pay more per month for multiple vehicles. Selling them and reducing the amount of vehicles you must insure is a sure way to let go of some hefty expenses.
- Reduce your policy or coverage. If you currently hold optional coverage in your insurance policy, consider removing them. Things like collision and comprehensive coverage may be considered optional. Or entertain the idea of increasing your deductible, while keeping in mind it still needs to be at a price point that you can afford for a repair to get your car up and running.
You’re doing the best you can to improve your financial health, and these are effective ways to add more margin within your budget to get you closer to your goals. Protect yourself by always having coverage for any vehicle you own, while also searching for the best options that don’t break the bank.