Own A Car Thats Inexpensive To Insure
The most impactful way to save on auto insurance as a low-income driver is to drive an inexpensive car. Examples include:
- Older cars. A car’s value depreciates over time, meaning that older cars are generally less expensive to insure.
- Smaller cars. Smaller cars typically have a lower replacement value and, therefore, a lower insurance cost.
- Cars with a good safety record. Cars with a history of fewer accidents or theft claims are less expensive to insure.
- Cars with a low theft rate. Cars that have fewer thefts have lower insurance rates.
Consider Your Coverage Levels
Unless you are currently over-insured, reducing coverage levels should be a last resort. Auto insurance premiums may be pricey, but they pale in comparison to the exorbitant costs associated with a severe auto accident. Potential medical bills, vehicle repairs, loss of wages due to injury, and even lawsuits can wreak havoc on your finances.
Do some research and speak with your insurance agent before getting serious about reducing your coverage levels. Let your agent know you are struggling to afford the coverage and see if there is anything they can do to help.
On the other hand, if you currently have more coverage than you need, it may be a good decision to reduce coverage to a more affordable level as long as it still meets your financial needs in the event of an accident.
Low Income Car Insurance: Auto Insurance For Low
In every state except New Hampshire, drivers are legally required to have an adequate amount of auto insurance coverage. If you know the basics of car insurance, then youâd know that the yearly cost of auto insurance premium can be anywhere from $500 to $2,000, depending on the type of car insurance coverage. The minimum required car insurance coverage averages annually at $563, while full car insurance coverage averages at $1,738.
For individuals and families with a lower income or budget, this can be a financial strain for the years to come. Fortunately, there are state-sponsored car insurance options and specialized car insurance coverage from certain car insurance companies that deal in low-income auto insurance at an affordable rate.
Following the law regarding car insurance shouldnât be expensive or hard. By shopping around and doing some research about your stateâs minimum car insurance laws and requirements, you may meet the state requirements for affordable car insurance.
Hereâs how you can qualify for low income auto insurance and what to know when it comes to this special type of car insurance coverage.
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Californias Government Assistance Program For Low
The California government has a car insurance assistance program for low-income individuals called Low Cost Automobile Insurance Program . This program is for drivers with a good driving record and a household income below 250% of the federal poverty level. It covers liability insurance and the has the following coverage limits:
- $10,000 per person for bodily injury
- $20,000 per car for bodily injury
- $3,000 per accident for property damage
To be eligible for car insurance through the Low Cost Automobile Insurance Program in California, you must:
- Be at least 16 years of age.
- Have a valid California driver’s license.
- Have a car thats worth $25,000 or less.
- Earn less than 250% of the federal poverty level.
What Is Low Income Car Insurance
Low income auto insurance isnât a regularly offered car insurance policy. Itâs specialized car insurance for low-income policyholders and households who need assistance to meet state minimum requirement when it comes to car insurance.
Since 49 out of 50 states require a degree of car insurance coverage while driving, low-income insurance satisfies those requirements affordably for low-income customers. Like the minimum car insurance requirement laws, the purpose of low-income car insurance is to keep uninsured drivers off the road.
Four states, California, New Jersey, Hawaii, and Maryland, offer their own low-income car insurance programs for residents at an affordable price even for low incomes.
Typically, state-level coverage has some low-income requirements that applicants must meet. You must make a certain amount of money, have a tangible history of government assistance, and in some cases, must have specific health conditions. A valid driverâs license and a clean driving record are some more common qualifications for obtaining a low income auto insurance assistance from those states. The value, make, and model of the car matters too, as states wonât insure a car thatâs over $25,000.
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Cheapest Auto Insurance In California For 20
For drivers with a recent accident in California, here are the companies with the lowest average rates for minimum coverage:
Grange Insurance Association: $1,008 per year, or about $84 per month.
Geico: $1,025 per year, or about $85 per month.
CSAA: $1,044 per year, or about $87 per month.
Wawanesa: $1,226 per year, or about $102 per month.
Travelers: $1,236 per year, or about $103 per month.
State Minimum Liability Coverage
Most states require a minimum level of liability coverage to drive legally. As a last resort to being able to afford your car insurance on a low-income, you may inquire with your insurance agent about reducing coverage levels to your states minimum. Although this is not an ideal solution, having minimum liability is better than having no coverage at all.
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Compare Car Insurance Quotes Instantly
The cheapest insurer we found for low-income drivers is USH& C, with average premiums of $110 per month.
California, Hawaii, Maryland, and New Jersey offer programs to help low-income drivers pay for car insurance.
Comparing quotes, applying discounts, and keeping a clean driving record will help drivers find and maintain low insurance premiums.
Minimum Auto Insurance Requirements In California
California drivers must carry liability insurance in the following amounts:
$15,000 bodily injury liability per person.
$30,000 bodily injury liability per accident.
$5,000 property damage liability per accident.
Liability car insurance covers the cost of any damage, injuries or deaths you cause in a car accident, up to your policys predefined limits. Experts recommend getting more than the bare minimum if you want to avoid dipping into your own savings to cover expenses.
For instance, California has a relatively low property damage minimum, only $5,000. If you cause an accident and total another drivers car, the damage could easily exceed that amount, and you would have to pay the difference out of pocket.
Check out NerdWallets guide to state car insurance requirements for more details on how the required and optional parts of your California policy work.
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Does The California Low Cost Auto Insurance Program Offer Enough Coverage
Californias minimum liability requirements are:
$15,000 for bodily injury liability per person
$30,000 for bodily injury liability per accident
$5,000 for property damage liability
Typically, California drivers must carry at least this much liability coverage to avoid facing legal penalties, but the CLCA program offers an exception to this rule. Drivers who are insured through the CLCA program have:
$10,000 bodily injury liability per person
$20,000 bodily injury liability per accident
$3,000 property damage liability
The coverage limits on the CLCA program are lower than the state minimum requirements, but the state has decided to waive the minimum liability requirements for those people who enroll in the program in an attempt to reduce the number of uninsured drivers in the state of California.
While it makes sense to offer more affordable insurance as a way to keep more drivers insured, the reality of the situation is that the state minimum coverage really isnt enough to protect people in case of a serious accident, let alone the lower levels of coverage offered through the CLCA program. Drivers in California should carry the highest levels of liability coverage they can afford.
Take Advantage Of The California Low
The California Low-Cost Automobile Insurance Program is available for any resident of California, regardless of immigration status. Its a state-sponsored program that provides car insurance at a reduced cost. There are a few eligibility requirements, including:
- Valid California residency
- Valid California drivers license
- Own a vehicle worth $25,000 or less
- Meet required income eligibility requirements
- Be 16 years or older
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Recap: Cheapest Auto Insurance Companies In California
The cheapest car insurance company in California is Wawanesa, which charges an average of $75 per month for state-minimum coverage. In addition to being the cheapest auto insurer for Californians overall, it is one of the cheapest option for a number of specific categories, such as good drivers and drivers with speeding tickets. For your convenience, weve summarized the cheapest companies overall below.
What Is The California Low Cost Auto Insurance Program
Californias Low Cost Auto Insurance program is designed to provide affordable insurance to low-income residents of the state. Drivers who meet the financial requirements and have a clean driving record are eligible for the program. Drivers who qualify for coverage must:
Have a valid California drivers license
Meet financial guidelines
Own a car worth less than $25,000
Have a clean driving record
Be of legal driving age
The CLCA insurance program allows drivers to legally have liability coverage at lower levels than the states minimum requirements to help reduce their insurance rates. The policy provides coverage for up to two cars, a primary driver, and eligible secondary drivers.
Ready to shop car insurance?
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Cheapest Car Insurance For California Drivers With Prior Incidents: Mercury
Overall, Mercury offers the most affordable rates for drivers with recent tickets or driving infractions.
Just one accident and claim on your driving record can increase your car insurance quotes by hundreds of dollars. Drivers with incidents on their records, such as accidents, speeding tickets and DUIs, often pay more expensive premiums than other drivers.
Cheapest Minimum Coverage Car Insurance By State
Most states do not have state-sponsored low-income car insurance programs. And yet, there are low-income people throughout the country. If you are one of those people, the best insurance providers to consider are Progressive and Geico.
Both insurers regularly advertise their low rates, and the data supports those claims. Our expert analysis finds that state minimums for Progressive and Geico are $315 and $318, respectively.
Keep in mind that these policies only cover the bare minimum, which includes bodily injury and property damage liability. Your car wont be covered with these policies, but this low income auto insurance will be meet the legal requirements.
- Full Coverage: 100/300/100 with Comprehensive and Collision, $500 deductible
- USAA is among the top 10 cheapest companies with a rate of $1,111 but is only available to military members, veterans and their immediate family.
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Final Thoughts On Government Auto Insurance
Government-assisted car insurance may be the best and most affordable option if you are a low-income earner and need help paying car insurance. State-sponsored programs offer cheap auto insurance to those who qualify based on their income.
You can also find other ways to get low-income car insurance by shopping around, considering pay-per-mile policies, applying for discounts, and reducing your coverage. Also, avoid letting your insurance lapse, as this will result in much higher rates when you reinstate your policy.
If you don’t qualify for government auto insurance, there are still options for finding affordable coverage, like shopping around and looking for discounts. The key is to research and find the best option for you.
California Low Income Car Insurance
Californias Low Cost Auto Insurance program is designed to provide affordable insurance to low-income drivers who meet the financial requirements and have a clean driving record. To qualify for the program, drivers must:
Have a valid California drivers license
Meet financial guidelines
Own a car worth less than $25,000
Have a clean driving record
Be of legal driving age
The CLCA insurance program provides liability coverage at lower levels than the states minimum requirements, but it is legally allowed by the state in order to help reduce insurance costs for low income drivers.
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Hawaii’s Low Cost Disability Auto Insurance Program
According to Hawaii state law, any driver or person unable to drive due to permanent disability who receives public assistance involving direct cash payments may receive free personal injury protection and liability insurance from the state.
For more information, contact the Hawaii Department of Commerce and Consumer Affairs.
Avoid Letting Your Insurance Lapse
Maintaining continuous auto insurance coverage is vital for several reasons. For one, it’s the law in most states. But beyond that, letting your insurance lapse can lead to much higher rates when you restart your policy.
Insurance companies view lapsed coverage as a risk since you were willing to drive without insurance at one point. As a result, you’ll likely pay a significantly higher rate than someone who has maintained continuous coverage.
If you’ve let your previous insurance policy lapse, you may have difficulty obtaining proof of prior insurance when you reapply. So if you don’t want to see your rates skyrocket, it’s best to avoid letting your car insurance lapse.
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How Much Does The California Low Cost Auto Insurance Program Cost
The rates can vary by county, but the average program participant can expect to pay between $244 – $966 each year. There are potential discounts available for people who have been a licensed driver for 3 years or more.
Program participants can either pay their premium in full or pay 20% with seven installment payments. Drivers who choose to make multiple payments should expect to pay an additional $4 fee with each installment.
The Rates For California Low Cost Car Insurance
The rates for the CLCA vary by county, but have been set in such a way that this program is essentially funded by the premiums and no tax dollars are ever used for it. Administered by the California Automobile Assigned Risk Plan, the rates are reviewed periodically and adjusted as needed. The policies themselves are actually written by licensed insurance companies of California.
Premiums, which are on a per car basis, can be as low as $161 in Imperial County and can go up to $368 in Los Angeles County. The average rate falls in the mid $200 dollar range. There is an optional add-on policy for Medical Payments for $1,000 in coverage. The premiums for this coverage range from $17 to $50 with an average cost being $23. Uninsured Motorist coverage can also be obtained through the plan for an additional $22 to $73.
The average cost is $37 and adds $10,000 per person and $20,000 per accident to your policy in the event you have an accident with someone who is not carrying insurance. Neither comprehensive nor collision are part of the program, but you are allowed to purchase them yourself for standard rates directly from your assigned insurance agent if you so choose.
All insurance companies licensed in California are required to participate and are not allowed to charge any fees for the program. As a participant, you do not have a choice as to who your provider will be the insurance company will be randomly assigned to you.
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Cheapest Car Insurance Companies For Low
We put together a list of the cheapest car insurance companies for low-income drivers. This way, you can be sure youre getting coverage to protect you and your family at the best rates. Staying safe on the road shouldnt break the bank. Keep reading to see what the average monthly quote is for some great insurance companies.
Be sure to shop around and keep in mind that these numbers are just averages. Your unique driving history and a number of factors will have a major effect on the cost of your car insurance, so get quotes from several different insurance companies and not just the ones with the lowest rates. The same exact driver can get different quotes from different car insurance companies.
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How Much Is It For Cheap Liability Insurance Or The Minimum Required Car Insurance In California
The average price for the mandatory minimum car insurance coverage in California is $61 per month. At first, that sounds like a great deal. However, paying the least amount for the least coverage is a precarious situation for many drivers who dont have enough cash savings to cover themselves and others if they wind up in an accident.
Because California is considered an at-fault state, your basic liability insurance will go towards paying for the other drivers injuries and damages if you caused the wreck. If someone else caused the crash, their liability will go towards your injuries and damages. Your own minimum liability coverage will never be used to pay for your expenses. That is why some drivers prefer to carry extra insurance in case there is an accident.
Some additional insurance to seriously consider is uninsured motorist insurance and/or underinsured motorist coverage. These optional car insurance packages will help pay for your costs if you are involved in an accident that is caused by a driver who either has no insurance, a hit and run driver or a driver who does not have enough insurance to cover your bills. When the insurance companies have finished paying the amount they are required to based on policy limits, whatever is left over has to come out of somebodys pockets.
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What Kind Of Car Insurance Coverage Do You Need
One more important thing to always think about is how much car insurance coverage youâll need to drive your vehicle legally. This is the key to not only getting the best automobile insurance coverage but saving money as well. A lot of low-income drivers under a new automobile insurance policy will set their deductibles to a higher amount. Granted, youâll have to pay more in the event of a car accident, but your automobile insurance premium will be much lower.
If you feel that you just need a vehicle to drive to and from work, pay per mile by the best national or regional insurer may be the cheapest option. Of course, reducing coverages on your policy is another way to lessen your monthly bills with your car insurance company.
The bundle discount on automobile insurance only works for new policyholders anyway. The 10% rule that was previously mentioned is used to gauge when an optional coverage is costing you a little more than you would like.
Should you choose to drop your comprehensive or collision insurance because it exceeds 10% of the payout, be aware that you donât want to lower it past anything you can afford to pay out of pocket as deductible.
You think you are paying too much for auto insurance? Insurance Navy can help you save some money!
Give Insurance Navy a call at 888-949-6289. We offer free, cheap car insurance quotes both online and in-person at one of our many locations. Good coverage can be very affordable.
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