Low-Income Car Insurance

For many individuals and families, the cost of auto insurance is a significant financial responsibility. Most states require a minimum level of liability insurance. If you're caught driving without insurance, the penalties could be stiff. Fortunately, some states offer low-income car insurance to ensure drivers can meet the legal requirements for auto coverage.

State Programs for Low-Income Car Insurance

Because most states require drivers to maintain a minimum level of coverage, some programs have been established to make car insurance more affordable.

In California, for example, the state's legislature passed a law in 1999 allowing low-income CA residents to purchase minimum liability insurance directly from the state's department of insurance. Purchasing this policy ensures that California drivers can meet the state's coverage laws without breaking the bank. Other states are also considering setting up their own low-income car insurance programs for residents who meet certain qualifications.

Qualification for Low-Income Car Insurance

To qualify for a low-income auto insurance policy, you must provide proof of income for all adults in the household. The size of the household includes all adults related by blood or marriage and all children.

In California, income-based eligibility is based on the current poverty guidelines provided by the federal Department of Health and Human Services.

If you do not meet the above qualifications, you may still have options to help you meet your state's minimum liability auto insurance requirements.

Strategies for Lowering Your Auto Insurance Costs

To lower your auto insurance rates, you might consider the following:

  • Keep your credit history clean.
    • Many car insurance companies check applicant credit history and base premiums on that information.
  • Drop your coverage to the state minimum for liability and raise your deductible.
  • Take advantage of all the discounts your provider offers, which may include those for:
    • Low mileage.
    • Good driver.
    • Good student.
    • Anti-theft and safety devices.
  • Find out if you can bundle your homeowner's insurance or renter's insurance policy with your vehicle insurance.
  • More expensive cars cost more to insure—if you're in the market for a new vehicle, look for one that's not over-the-top.

When the price of your premium does not fit into your household budget, look into all resources available to you. Government assistance programs regularly change their eligibility requirements; if you did not qualify last year, you might qualify the next. Don't hesitate to speak frankly with your insurance agent about your financial situation. They may be able to offer valuable advice and discounts.