With a recent study, Online Auto Insurance (OAI) checked to see what states offer assistance to drivers at or below the poverty line.

It’s a small list.

California, New Jersey, and Hawaii offer government-backed programs to keep low-income drivers insured. And the savings offered are significant.

In California, the program’s highest costs are about $400 per year for basic liability insurance. A type of medical liability insurance is offered in New Jersey for $360, less than a dollar per day.

In Hawaii, basic liability coverage is absolutely free for some low-income drivers.

The success of these programs, who qualifies, and what’s covered varies state by state. Below, OAI explains how the programs work in each state.


Fewer than 20,000 people take part in the state’s low-income insurance program. In a hearing at the state Capitol, insurance officials reported that a large barrier to the program’s success is the reluctance of undocumented workers to fully utilize the program for fear of being caught in the country illegally. The latest figures from 2004 show about 3.5 million registered vehicles were uninsured in California.

The average price for an annual premium through the California Low-Cost Automobile Insurance Program varies by county. In San Francisco the cost is $276, according to the state’s website, while in Los Angeles the cost is $338. That can be up to $1,500 cheaper than insurance purchased outside of the program.

To be eligible for the program, drivers must be residents of California. They have clean driving histories with no suspensions, at-fault accidents, failure-to-appear citations or moving violations for at least three years. Drivers have to be over 19 years old and must have at least three years of licensed driving experience. Participants cannot own another car insured outside of the program, cannot use the policy for a work vehicle, and must earn less than $58,875 for a family of four.

Also, in most cases, the driver must own the vehicle they are insuring through the program outright.

The program only offers basic liability, covering up to $20,000 for injuries caused by the insured driver and $3,000 for property damages.

New Jersey

Just over 20,000 people are covered in New Jersey’s Special Automobile Insurance Policy (SAIP). Similar to personal injury protection policies, the program offers motorists medical coverage if they are injured during an auto accident.

The price is $360 if paid in full, or $365 if paid in two installments. According to the New Jersey Department of Banking and Insurance, up to $250,000 in coverage is offered if there is a significant physical injury, such as brain damage or spinal cord dislodgement. The insurance does not cover any vehicles or property damaged by the accident, regardless of fault. There is also a $10,000 death benefit.

Eligibility for the New Jersey plan centers on Medicaid. Participants must be enrolled in the Federal Medicaid with Hospitalization plan.

Prospective participants must also have a valid license and current registration on their vehicle. SAIP covers only one vehicle per policy.

To enroll, prospective participants must bring their license, registration and Medicaid card to an approved insurance agency, where eligibility will be determined by a broker or an agent.


Hawaii offers free no-fault auto insurance to people receiving various forms of welfare or supplemental security income (SSI) benefits.

Yet, the program is so small not even the Hawaii Office of the Insurance Commissioner was aware it existed. A spokesman for the agency told OAI he “doesn’t think there is such a program,” but wasn’t sure. He later emailed back confirming the law is on the books.

[According to state statute], no-fault auto insurance at no cost is available to all people who receive public assistance such as cash payments, food vouchers, SSI benefits, or medical service benefits prior to 1994. The driver must also have a valid license, or be in the care of a person with a valid license, and be the sole registered owner of the vehicle. The driver also must have looked for paid no-fault coverage and been unable to afford it before applying for the program.

The maximum benefit through the state plan is $40,000 per accident for injuries or death, and $10,000 for property damage, the standard for Personal Injury Protection (PIP) for Hawaii.

It is unclear how many low-income drivers take advantage of the policy. Based on Hawaii’s population, requirements, and reaction from the office of the Insurance Commissioner, it is likely that very few drivers do, if any.


Car insurance is mandatory in all states, except New Hampshire. The Insurance Research Council (IRC) estimates that almost 14% of all motorists are uninsured. Meanwhile, the U.S. Census estimates that some 46 million Americans live in poverty.

With only three state programs offering assistance to low-income drivers, some anti-poverty advocates are calling on state legislatures to take a new look at assisting these motorists. Many states — including and have considered similar programs in the past, but have squashed those plans because of cost, logistical challenges due to delivery, or objection from the insurance industry.

The IRC estimates uninsured drivers, many of them low income, caused almost $11 billion dollars in damages during 2010.