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Like many Americans, you have likely found yourself scouring the web for more affordable auto insurance, and you may have encountered the phrase “government auto insurance.” But what is government auto insurance, and who is eligible?
In this article, we’ll review who can get government auto insurance in the three states it’s offered – California, Hawaii and New Jersey. We’ll also give tips on how to lower your auto insurance rates if you don’t qualify for a government-sponsored plan.
You can start finding the lowest prices from the best auto insurance companies in your area using our free tool above. Simply type in your ZIP code to get started.
What is Government Auto Insurance, Exactly?
Government-sponsored auto insurance programs, also called public auto insurance, are designed to help low-income families gain access to affordable insurance. Currently, these programs are only offered in California, Hawaii and New Jersey. Maryland has a similar program, but it is not government-sponsored.
Who Qualifies for Government Auto Insurance?
Since public auto insurance programs are backed by state governments, they can offer drivers significantly lower rates than traditional insurance companies. Each state has unique income-based qualification requirements, which we’ve outlined below.
California’s government auto insurance requirements are fairly straightforward. To enroll in the program, called California’s Low Cost Auto Insurance Program (CLCA), you must have a valid state driver’s license, be over 16 years of age and own a vehicle valued under $25,000. You must also have a good driving record.
As noted above, each state also has income-based requirements. In California, the maximum allowable income will vary based on your household size:
- 1 person: $32,200
- 2 people: $43,550
- 3 people: $54,900
- 4 people: $66,250
- 5 people: $77,600
Government-sponsored insurance will be significantly cheaper than the average annual cost of private insurance, which is roughly $1,034 in California, according to the National Association of Insurance Commissioners (NAIC).
Hawaii’s government-sponsored insurance program is a bit more restrictive. You must have a valid Hawaii driver’s license and be a resident of the state. As with California, the state has set income thresholds based on household size, but these correspond with the state’s low-income assistance program.
Hawaii’s government auto insurance is overseen by the state’s office of financial and food assistance benefits. As such, you must be receiving federal supplemental security income (SSI) or other financial assistance to qualify for government auto insurance. You will be able to get free car insurance if you’re enrolled in the state’s Aged, Blind and Disabled (AABD) program. Hawaii’s annual average auto insurance cost for those with private coverage is about $829, according to the NAIC.
New Jersey’s government auto insurance program, called Special Automobile Insurance Policy (SAIP), has the simplest qualification process. To qualify, you have to be currently uninsured and also be enrolled in a Medicaid program that includes hospitalization coverage. If you meet both of these requirements, you will qualify for “dollar a day” auto insurance. However, it only provides medical coverage and does not meet the state’s minimum car insurance requirements for most drivers.
New Jersey also offers a basic plan, called the New Jersey Personal Automobile Insurance Plan (NJ PAIP), that is available to the majority of residents. This plan offers better coverage, but it is also more costly.
Generally, it is a good idea to compare this coverage to that of private insurance providers to ensure you get the best rates. However, it will most likely be far cheaper, since New Jersey’s annual average for coverage is about $1,386, according to the NAIC.
How to Get Low Rates If You Don’t Qualify for Government Auto Insurance
Unfortunately, most states do not offer government auto insurance. Even the few that do have very stringent qualification requirements. However, you can still find great rates by using the following tips when you’re searching for a new auto insurance provider.
1. Shop Around
If you are really out to get the cheapest car insurance, you need to shop around. Don’t jump at the first offer you receive, even if it sounds great. At a minimum, you should obtain three to four different quotes before committing to a provider.
Obtaining quotes is free and has minimal risk. The worst thing that can happen is that you may receive one too many emails from one of the companies you contact. However, putting a stop to that is as easy as clicking that “unsubscribe” button at the bottom of your message.
Using the tool below is an easy way to get multiple free estimates in your area and connect with leading insurance providers.
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2. Ask About Discounts
Many major providers offer a variety of insurance discounts. When you are obtaining quotes, make sure you ask about these money-saving opportunities. Doing so can save you hundreds of dollars and decrease your monthly insurance premium payments.
You may be surprised what types of discounts are available to you. Discounts may be offered to entire industries (such as medical personnel or federal government employees) or be included when you pay your six-month premium in a lump sum.
3. Bundle Your Coverage
Many insurance companies offer more than just auto coverage. Find out whether you can bundle home, auto, and even life or disability insurance. Doing so is an efficient way of cutting costs. It also simplifies your monthly insurance payments.
Our Recommendations for Car Insurance for Low-Income Drivers
Sorting through the dozens of private auto insurance providers can be a challenge. To help, we have provided some useful information on two of the top insurance companies, GEICO and USAA, below. Both of these insurers have great reputations for both affordability and customer service.
GEICO: Best Overall
We give GEICO a 9.8 out of 10.0-star rating for industry reputation and a 8.5 for coverage. While it is our top choice for an all-around provider, it lost points for some issues with its autopay program. In addition, you may not be able to connect with a local insurance agent, depending on your region. However, you can still obtain a quote by speaking with agents over the phone or online.
Some of the benefits of purchasing insurance with this company include:
- Good student discounts
- Intuitive mobile app
- Strong financial standing
- Excellent customer service
GEICO’s pricing is typically consistent with or lower than the averages for each state. However, it also offers plenty of discounts, including programs for multiple vehicles, military members, federal employees, seniors, certain alumni groups and more.
USAA: Best Military Provider
USAA is another one of our highly rated insurance providers. We give it an 9.5 for coverage, 9.3 for reputation, 10.0 for cost, and 9.3 for customer experience. However, the company has extremely strict eligibility requirements. Currently, only military members and their families are eligible for USAA auto insurance coverage.
If you are eligible, you can’t go wrong with USAA. It has stellar claims servicing and flexible payment plans. USAA even offers mileage-based plans for people that don’t do much driving.
Other benefits of choosing USAA auto insurance include:
- Military-specific discounts for things like deployment or garaging your vehicle on-base
- Longstanding history of providing excellent service
- Strong financial standing
- “A” rating from the Better Business Bureau (BBB)
FAQ: What Is Government Auto Insurance?
What are the four main types of car insurance?
There are a few auto insurance policies drivers can choose from. The four main types of coverage are liability coverage, comprehensive coverage, collision coverage and personal injury protection (PIP). You may also encounter medical payments coverage and uninsured motorist coverage. If you see the term “full coverage auto insurance” it’s referring to a combination of liability, comprehensive and collision coverage.
Do I have to be in the military to get USAA coverage?
Technically, no, you do not have to be a member of the military to get USAA coverage. However, you do have to be a qualified family member of military service personnel. USAA is strict on this requirement and currently offers no exemptions.
Is GEICO a type of government insurance?
While GEICO stands for Government Employees Insurance Company, it is not a form of government auto insurance. The name was chosen based on the company’s original customer base, which consisted of government employees and military personnel.
Is GEICO cheaper for government employees?
Yes, GEICO offers various discounts, including price reductions for government employees and military personnel. It also offers several other discount programs, many of which can be combined to obtain cheaper rates.
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, pricing, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.