Last Updated on December 27, 2025

If you’re on a tight budget, car insurance can feel like one of the hardest “must-pay” bills—especially as premiums rise in many states. And while some people assume there must be a national assistance program, that’s usually not how auto insurance works in the U.S.

In most cases, public benefits don’t directly pay your car insurance bill (though there are exceptions and related programs). Here’s a deeper breakdown of whether welfare pays for car insurance and what kinds of help may exist where you live.

To make matters worse, many drivers are seeing increases due to broader market trends, inflation in repair costs, higher claim severity, and insurer pricing changes. If your premium recently jumped, this guide on why car insurance companies raise rates explains the most common reasons.

Key Takeaways

• Government-sponsored low-income auto insurance is rare—California, New Jersey, and Hawaii are the main states with well-known programs tied to income or benefit eligibility.
• California’s CLCA can be a major cost-saver for qualifying drivers, but it’s liability-only (no collision or comprehensive for your own car).
• New Jersey’s “Dollar-a-Day” (SAIP) is medical coverage only—it does not include liability coverage or repairs to your vehicle.
• If you don’t qualify for a state program, the biggest savings usually come from comparing quotes, using discounts, and adjusting coverage (especially on older vehicles).

Do Any States Offer Low-Income Auto Insurance Programs?

Yes—but it’s rare. Only a few states have government-sponsored programs that are specifically designed to help qualifying low-income drivers (or certain benefit recipients) get insured. The three states most commonly cited are:

• California (California Low Cost Auto Insurance Program / CLCA)
• New Jersey (Special Automobile Insurance Policy / SAIP, “Dollar-a-Day”)
• Hawaii (a no-cost option through the state’s Joint Underwriting Plan for certain public assistance/SSI recipients and specific groups)

Below is a quick comparison, then we’ll break down how each one works and what to do if you don’t live in one of these states.

California: Low Cost Auto Insurance Program (CLCA)

California’s program is the best-known “low-income car insurance” option in the U.S. It’s designed to help income-eligible drivers get basic liability insurance at a lower cost than a traditional policy. If you’re unsure whether it’s legitimate or worth it, start here: California’s Low Cost Auto Insurance Program (CLCA) explained.

Who Typically Qualifies?

Eligibility is based on a few factors (not just income). In general, you’ll need to:

• Have a valid California driver’s license (most applicants must be licensed)
• Meet income guidelines based on household size (the program commonly aligns with around 250% of the federal poverty guidelines; for example, a 1-person household may qualify around the $39k range, and a 4-person household around the $80k range—check the current table before applying)
• Own a vehicle valued at $25,000 or less
• Be at least 16 (applicants under 18 generally must be legally emancipated)
• Have a good driving record or be a new driver (your driving history matters a lot—see how driving history affects insurance rates)

You can review current qualifications and income limits here: CLCA qualifications.

What Does CLCA Cover?

CLCA is liability-only coverage. That means it helps pay for injuries and damage you cause to other people—not repairs to your own car. If you want a quick refresher on what liability actually does (and doesn’t) cover, read auto liability insurance explained.

The program’s basic liability limits are lower than what many drivers choose on a standard policy, and it does not include collision or comprehensive. However, CLCA does allow optional add-ons in some cases (like uninsured motorist bodily injury and a small amount of medical payments). If you’re not familiar with MedPay, this guide explains what medical payments coverage is.

For the official coverage summary and options, see: CLCA coverage details.

How Much Does CLCA Cost?

Premiums vary by county and driver profile, but the program is designed to be far more affordable than many standard policies. You can estimate your premium using the program’s official tool: CLCA rate calculator.

If you’re wondering why California in particular can be so costly for many drivers (even outside CLCA), see why car insurance is expensive in California.

How to Apply

• Start at mylowcostauto.com to check eligibility and apply online or find a certified agent.
• You can also read the California Department of Insurance overview here: California’s Low Cost Auto Insurance Program.

New Jersey: SAIP “Dollar-a-Day” Insurance

New Jersey’s program is widely known as “Dollar-a-Day” insurance, but it’s important to understand what it really is: a medical coverage-only policy designed for certain Medicaid recipients. Here’s our breakdown of whether Dollar-a-Day (SAIP) is legit in New Jersey and who it’s meant for.

Who Qualifies?

Eligibility is tied to a specific type of Medicaid enrollment (“Federal Medicaid with hospitalization”). Not all Medicaid programs qualify, so you’ll want to confirm through a producer/agent.

If you’re trying to understand how Medicaid interacts with auto insurance more generally, this is a good read: does Medicaid cover auto insurance?

What Does SAIP Cover (and Not Cover)?

SAIP generally covers emergency treatment immediately following an accident and catastrophic brain/spinal cord injuries up to a stated limit, plus a death benefit. It does not cover:

• Damage you cause to other people or property (no liability coverage)
• Damage to your own vehicle (no collision or comprehensive)
• Outpatient treatments typically covered by Medicaid

Cost and How to Apply

New Jersey’s Department of Banking and Insurance posts current SAIP details (including cost and where to buy it) here: Special Automobile Insurance Policy (SAIP).

Hawaii: No-Cost Coverage for Certain Public Assistance or SSI Recipients

Hawaii has a unique option that can provide no-cost basic auto insurance through the state’s Joint Underwriting Plan for very specific groups—primarily certain public assistance recipients and SSI recipients, including some permanently disabled individuals who are unable to operate the vehicle but are the registered owner.

This program is closely connected to Hawaii’s no-fault system, which includes personal injury protection (PIP) rules. If you’re eligible, the process typically involves getting a certificate of eligibility and submitting it to a servicing carrier.

For an overview of how the certificate process works (and who it applies to), see: Hawaii administrative rule on public assistance benefits recipients.

Also note: Hawaii’s rules can treat disability differently than many states. If you’re navigating insurance with a disability, this may help: is car insurance cheaper if you are disabled?

If You Don’t Live in CA, NJ, or HI: Practical Ways to Lower Your Premium

Most states don’t offer a government-sponsored low-income auto insurance plan. But you can still cut costs—sometimes dramatically—by shopping smarter and tailoring coverage to your situation.

1) Compare Quotes (Even If You Like Your Insurer)

Pricing varies wildly between companies—especially for state-minimum coverage. Start with a list of the cheapest auto insurance companies and then compare based on your ZIP code and driving profile.

2) Consider State-Minimum Coverage Carefully

Dropping to minimum coverage can lower your bill, but it also increases what you might pay out of pocket after a serious crash. If you’re forced into the cheapest option, read this first: why the cheapest insurance isn’t always the best insurance.

3) Drop Collision/Comprehensive on an Older Car (When It Makes Sense)

If your vehicle is older and not worth much, paying for “full coverage” may not pencil out. Many drivers save the most money by carrying liability only—especially if they can’t afford a high deductible and don’t have a loan/lease that requires physical damage coverage.

4) Ask About Low-Mileage and Usage-Based Programs

If you work from home, use public transportation, or drive very little, ask insurers about low-mileage discounts or usage-based programs. For some drivers, this is one of the easiest ways to reduce premiums without gutting coverage.

5) Watch Out for “Hidden” Rate Drivers

Two common issues: (1) adding a newly licensed driver can spike premiums, and (2) lapses in coverage can make your next policy more expensive. If you’re insuring a teen, this guide to cheaper car insurance for teens may help you plan ahead.

6) Keep Your License and Documentation in Order

Most insurers—and especially state programs—require a valid driver’s license. If you’re in a tricky situation, read this guide on auto insurance without a driver’s license so you know what’s realistic in your state.

FAQs on Low-Income Auto Insurance Options in the U.S.

Final Word: Low-Income “Car Insurance Help” Exists, but It’s Limited

There are real state-sponsored options in California, New Jersey, and Hawaii—but they come with strict eligibility rules and limited coverage. Outside those states, the most reliable path is usually (1) shopping rates regularly, (2) using every discount you qualify for, and (3) choosing the best coverage you can afford without risking a major financial hit after a crash.

If you want to see how costs vary in your area, start with this state-by-state resource: insurance rates per state. And if you receive SSI or similar benefits, you may also find additional ideas here: affordable car insurance options for SSI recipients.