How To Get Low-income Car Insurance: Find the Cheapest Rates … – MarketWatch

How To Get Low-income Car Insurance: Find the Cheapest Rates … – MarketWatch

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Low-income car insurance programs are in California, New Jersey and Hawaii, but you can also find cheap car insurance by shopping around to compare rates
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Daniel is a MarketWatch Guides team writer and has written for numerous automotive news sites and marketing firms across the U.S., U.K., and Australia, specializing in auto finance and car care topics. Daniel is a MarketWatch Guides team authority on auto insurance, loans, warranty options, auto services and more.

Rashawn Mitchner is a MarketWatch Guides team editor with over 10 years of experience covering personal finance and insurance topics.
Finding low-income car insurance can be challenging. Unfortunately, only three states offer low-income car insurance programs. If you don’t live in one of these states, you’ll have to shop around for the cheapest standard insurance available.
In this article, we at the MarketWatch Guides team will show you where to look for low-income car insurance programs and give you tips on how to save on car insurance. We’ve compared the best car insurance companies, and we’ll rank our top picks by cost here.
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The MarketWatch Guides Team is committed to providing reliable information to help you make the best decision possible about insuring your vehicle. Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. After 800 hours of research, the end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Learn more about our methodology and editorial guidelines.
Having a lower income doesn’t affect your insurance, but it can make it more difficult to find affordable coverage. In the sections below, we’ll go through some tips to help low-income drivers find insurance coverage that fits into a tight budget.
You don’t want to sabotage yourself if you need low-income car insurance. Accidents and tickets on your driving history can raise your insurance rates no matter your income level. By keeping a clean driving record, you’ll find the best rates and also qualify for safe driver discounts.
Many insurers offer discounts to drivers who complete approved defensive driving classes. Even if your provider doesn’t offer a defensive driving discount, the class may help you learn skills that can make you a better driver. If you’re able to improve your driving record, you can qualify for good driver discounts.
Usage-based programs, also called telematics insurance, track your driving habits and award car insurance discounts based on safe driving. Progressive’s Snapshot®, State Farm’s Drive Safe & Save™ and Allstate’s Drivewise® are examples of these kinds of programs. You can also try mileage-based programs like Metromile or Nationwide’s SmartMiles® if you don’t drive very often.
Car insurance rates vary widely depending on the provider. To find the best low-income car insurance, be prepared to compare rates from five or more companies. Shop online but also use independent insurance agents and brokers to find every opportunity for cheap coverage.
If you have poor credit, it’s worth trying to improve your credit score. If you’re able to pay down debts, make on-time payments for utilities and credit card bills and increase the length of your credit history, you can improve your credit score. Raising your score by even just a few points can help you save money on auto coverage, since the higher your score, the more likely it is to find affordable rates.
Keep in mind that California, Massachusetts, Michigan and Hawaii bar auto insurance companies from using credit to determine rates. If you live in any of these states, you should look at other ways to find cheap car insurance.
According to our averages, a single accident can raise full-coverage insurance rates by about $873 on average. The amount of time an accident stays on your insurance record depends on the state you live in and your provider. If the limit in your area is three years, you could pay an extra $2,619 on average for one accident over that time. If you get into a minor fender bender, consider covering the cost yourself to avoid an increase in rates.
You can change your car insurance premium by changing your deductible amount. Your car insurance policy will cost less if you raise your deductible because you take on more of the financial risk. But be sure you could afford to pay the deductible if an accident were to happen.
You can also reduce your insurance coverage to save money if you’re comfortable with that. If you own your car outright, you can drop comprehensive and collision coverage. However, you’ll need to be able to afford to fix or replace your car if you get into an accident. We recommend dropping these coverages if your car is worth $5,000 or less.
If you’re in the market for a new or used car, try to choose one that’s cheap to insure. Generally, smaller used vehicles with safety features are cheapest to insure. They might not be the most thrilling rides, but they’ll help you save money.
 
 
There aren’t many auto insurance assistance programs in the country. You can only find low-income car insurance options in California, New Jersey and Hawaii.
California’s Low Cost Auto insurance program (CLCA) helps provide car insurance for drivers who can’t afford standard coverage.
To qualify for CLCA coverage, you need to:
You also need to meet income requirements. We’ve listed a few below, but the CLCA website has a calculator for any household size.
California’s car insurance assistance program offers liability coverage that meets the state’s minimum requirements. That means it covers damage to other cars and other people’s medical bills when you cause an accident. Here’s what it covers:
You also have the option to add medical payments or uninsured motorist coverage. This costs between $37 and $107 per year. Here are the details:
You can insure up to two vehicles through CLCA. If you own more than two vehicles, you won’t be able to insure any more than two. The program also requires that you only have liability insurance with CLCA and not another provider. If you have another provider for one of your cars, you aren’t eligible for CLCA.
New Jersey offers partial low-income auto insurance under the Special Automobile Insurance Policy (SAIP). This program only offers medical coverage and death benefits for you. It doesn’t offer liability insurance, comprehensive coverage, collision coverage or anything else.
To be eligible for this program, you need to be enrolled in federal Medicaid with hospitalization. The SAIP program is geared toward people who would likely be uninsured because of their financial situation. It costs $365 per year to have SAIP. You make two payments of $182.50, but you get a $5 discount if you pay in full.
Here’s what the SAIP program covers:
Again, this is only medical coverage for you. SAIP won’t cover passengers, other drivers or damage to your car or other cars in accidents you cause.
Hawaii offers car insurance assistance under its Assistance to the Aged, Blind, and Disabled (AABD) program. Participants in this program must meet one of the following criteria:
You also have to have countable income below 34% of the 2006 federal poverty level. Finally, your cash resources can’t exceed $2,000 for a single person or $3,000 for a couple.
 
 
If you’re looking for the cheapest coverage possible, consider minimum liability coverage. According to our rate averages, the cheapest liability car insurance available nationwide is typically Geico, which has an average cost of $468 per year or $39 per month for 35-year-olds. USAA is cheaper on average, coming in at $333 per year or about $28 per month, but it’s only available to military members and their families.
You’re on your own for low-income car insurance if you don’t live in California, New Jersey or Hawaii. That means you need to compare your options to find the cheapest coverage available to you. We recommend checking rates from online sources as well as working with car insurance brokers and independent agents that can connect you with all the companies in your area.
Below, you can see minimum coverage rate averages for a variety of car insurance companies. These are major and regional providers, but there may also be smaller providers in your area that offer cheaper rates.
For example, we found Farmers Mutual of Nebraska costs as little as $195 per year for minimum coverage on average. We encourage you to check out small providers including Farm Bureau insurance for cheap rates.
 
 
If you’re looking for full-coverage insurance, a variety of companies offer cheaper-than-average rates. Our averages show Nationwide is generally the cheapest major provider, with average rates of $1,281 per year or $107 per month.
Below are full-coverage cost averages for 10 car insurance providers. As with liability coverage, some local companies or farm bureaus may be more affordable in your situation.
Car Insurance Company
Average Monthly Rate
Average Annual Rate
USAA
$88
$1,054
Erie Insurance
$103
$1,238
Nationwide
$107
$1,281
Geico
$109
$1,308
Auto-Owners Insurance
$111
$1,337
State Farm
$123
$1,481
American Family Insurance
$128
$1,537
Progressive
$134
$1,611
Travelers
$139
$1,669
Allstate
$174
$2,088
 
 
If you live in California, New Jersey or Hawaii, you may have access to state programs for low-income car insurance. But if you don’t, you can still find affordable auto insurance coverage by following the tips we’ve outlined above. Compare car insurance quotes from multiple companies to find the most affordable option.
We’ve ranked all major car insurance companies on cost, coverage, reputation, availability and customer experience. We’ve also surveyed nearly 8,000 customers on their experiences in 2022. Overall, we recommend State Farm and Geico as two of the best options for affordable coverage.

Source: Automoblog
State Farm is our top pick for its wide variety of coverage options, good discounts and low average rates. State Farm is the country’s largest insurance company and it has a solid industry reputation. In addition to its bundling and good driver discounts, the company also offers a usage-based program called Drive Safe & Save™, which can help drivers save money.
Keep reading: State Farm insurance review
Geico is among the cheapest car insurance companies for most drivers, including low-income individuals. Our rate averages show Geico’s average prices are about 24% cheaper than the market average. We also found the company tends to offer affordable rates for different types of drivers, such as those with accidents or speeding tickets.
Keep reading: Geico insurance review

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The most basic form of car insurance is liability coverage. This only covers damage to other cars and medical bills for other people when you cause an accident. It doesn’t cover your car or your injuries.
The California Low Cost Auto (CLCA) insurance program provides affordable insurance coverage to people who can’t afford standard coverage. Drivers can insure up to two cars, and the coverage applies to a primary and secondary driver.
The CLCA program only insures two vehicles per person.
According to our rate averages, full-coverage car insurance from Geico averages about 24% cheaper than the industry average. Also, minimum coverage costs about 26% less on average with Geico than the national average. This makes Geico one of the cheapest companies available.
 
 
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
Our credentials:
*Data accurate at time of publication.
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