Car Insurance for Welfare Recipients

Low-income car insurance is available in California, Hawaii, and New Jersey. Affordable rates can be as low as $241 per year. Check with your insurance company to see if you qualify for welfare policies. Comparison shopping can help you find cheap car insurance rates. To get started, enter your ZIP code now.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you need to know...

  • Auto insurance is required in all states
  • Driving around uninsured can get you into big trouble
  • There are a few states that offer low-income families programs to those that receive temporary assistance
  • Rates can be as low as $241 per year, depending on what state you live in
  • You may be able to take advantage of auto insurance discounts

Car insurance is required to drive in all states. For welfare recipients, it can be overwhelming to afford the high annual costs of insurance. Don’t let the cost of car insurance hinder you from doing the things you need to do on a daily basis.

What’s the best option then for car insurance for welfare recipients? There are low-cost programs that may be available to help you obtain car insurance for your vehicle.

Even though car insurance can be expensive for low-income families, they still must meet these legal requirements. Only a few states provide special car insurance for those who can’t afford buying coverage from auto insurance companies.

Ready to buy low-income car insurance? Compare low-income car insurance rates and options right now by entering your ZIP code above.

Does welfare pay for car insurance?

According to a 2014 study conducted by the National Association of Insurance Commissioners (NCAIC), nearly 13 percent of drivers were uninsured.

Another study by the Financial Responsibility and Insurance Committee found that among those who were driving uninsured, 82 percent indicated that they did so because they could not afford to pay the high cost of insurance.

Driving uninsured is subject to consequences. Each state has its own penalties, but just know that the consequences are not worth the risk.

If you get caught driving uninsured, you can expect one or more of the following penalties:

  • Expensive fines
  • Suspension of driver’s license
  • Suspension of vehicle registration
  • Ticket for no insurance
  • Jail time for repeated offenses

These penalties are serious, but you can face even greater risk if you get in an accident while driving without insurance. The cost of insurance may seem high, but just imagine the financial impact of causing serious injury to yourself or others.

If you don’t have the money to pay for the damages, then your assets could be taken away. As you can see, it doesn’t pay to drive uninsured.

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Is there government assistance for car insurance?

Only a few states provide a government auto insurance program to help low-income drivers who can’t afford coverage elsewhere.

Here are the three states that offer low-income car insurance:

  • California
  • Hawaii
  • New Jersey


California is one of the most expensive states for car insurance in the nation.

To lower the rate of uninsured drivers, the state has developed California’s Low-Cost Automobile Program (CLCA), which gives low-income drivers a means to insure their vehicles at an affordable price.

To qualify, you must:

  1. Have a valid driver’s license
  2. Meet income eligibility requirements
  3. Own a vehicle valued at $25,000 or less
  4. Be at least 19 years of age
  5. Have a clean driving record for the past three years

If you qualify, you can purchase up to:

  • $10,000 of bodily injury coverage
  • $20,000 per accident bodily injury or death coverage
  • $3,000 for per accident property damage coverage

Other auto insurance policies such as underinsured motorist and medical payments policies are also available through CLCA. Depending on where you live, the annual premium ranges from $241 to $556 per year.

If you can’t get a government auto insurance program for low-income drivers, you’ll have to purchase a standard policy from an insurance company. Car insurance companies won’t determine your car insurance rates based on your income. They’ll use factors such as age, location, driving history, coverage levels.

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Hawaii offers free personal injury protection and liability insurance from the state to those who received financial assistance through the Aid to Aged, Blind, and Disabled program. You must be aged 65 or older and meet at least one of the following requirements:

  • You’re blind
  • You have a terminal condition that prevents you from working
  • You have a physical or mental disability that prevents you from working
  • You live with and take care of someone who received AABD financial assistance

New Jersey

New Jersey has implemented the Special Automobile Insurance Policy (SAIP) to help drivers with limited means to afford car insurance. In order to be eligible, you must have a valid New Jersey driver’s license and be currently enrolled in federal Medicaid with hospitalization.

The annual premium of SAIP is $365. Payment can either be made all at once in one lump, or it can be split into two installments. SAIP covers emergency treatment immediately following an accident and treatment of brain and spinal cord injuries up to $250,000.

SAIP also provides a death benefit in the amount of $10,000. It does not cover outpatient treatments or damage that you caused to another person or their property.

If your Medicaid benefits are canceled during your standard policy term, you won’t lose your SAIP auto insurance. However, it cannot be renewed once your current policy is expired.

How can I get super cheap car insurance?

Unfortunately, there are only three states that offer low-cost insurance programs to those who receive state assistance. But that doesn’t mean, you can’t find affordable insurance otherwise.

Shopping online is the best way to find low-cost insurance. By using online comparison tools, you can obtain multiple quotes all at once to help you find the coverage that works best for you at a price that you can afford.

For you to save the most on car insurance, it’s important to understand what factors affect car insurance rates. Don’t expect to find cheap car insurance if you get tickets for speeding or other traffic violations.

If you do get a ticket, see if there is an opportunity to get it dismissed or reduced. Keeping it off your record could save you hundreds of dollars in the long run.

If you drive a junk car that isn’t worth much, you might want to think about dropping collision and comprehensive coverage, which pay for damage to your vehicle.

There’s no sense in paying for coverage on a car that’s worth less than the deductible plus the amount you pay for annual coverage. Instead, consider setting the money aside so you have a down payment for a newer car in case your junker decides to give out on you.

Consider buying a car that’s cheap to insure. The type of vehicle you drive has a big impact on how much the insurance premium will be.

One of the biggest money-savers that drivers miss out on is car insurance discounts. All auto insurance companies offer different discounts, so make sure you ask your agent to find out everything you’re entitled to.

Here are some common car insurance discounts:

  • Multi-car discount
  • Good student discount
  • Bundling car and home insurance policies discount
  • Accident-free discount
  • Defensive driving course discount
  • Safety features discount

So the best way to save money on car insurance is to shop around, apply for car insurance discounts, purchase pay-per mile car insurance policy, or reduce the coverage limits.

Make sure you maximize all your opportunities for finding low-cost auto insurance, whether it’s through a state program or taking advantage or insurance discounts. Insurance is important to have, no matter your financial situation.

Looking for affordable low-income car insurance? Compare low-income car insurance quotes today by entering your ZIP code below.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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