Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jun 16, 2020

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Things to Remember
Summary InfoFrom Experts...
Every state in America requires that drivers carry a minimum amount of car insurance so that all parties are protected if an accident would occurInsurance Information Institute
Government auto insurance is a state-sponsored program that helps lower-income families get the car insurance that they legally need to be able to drive their carCalifornia Department of Insurance, Hawaii Department of Human Services, New Jersey Department of Banking and Insurance
Only three states currently offer government insurance: California, Hawaii, and New JerseyCalifornia Department of Insurance, Hawaii Department of Human Services, New Jersey Department of Banking and Insurance
All three programs have very specific requirements individuals must meet, in order to qualifyCalifornia Department of Insurance, Hawaii Department of Human Services, New Jersey Department of Banking and Insurance
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Government auto insurance programs are available in states like California, Hawaii, and New Jersey. Every state in America requires drivers to carry a minimum auto insurance coverage so that all parties are protected in the event of an accident. You might be able to find cheap low income government auto insurance rates if you are willing to research options. Finding low cost auto insurance from the government is not an option in every state but shop around to see how you might be able to get free auto insurance rate quotes.

Each state has their own laws regarding how much insurance is required, but in general it’s illegal to drive without auto insurance. Unfortunately, auto insurance can be expensive and in order to be able to legally drive, some people may have to give up other things, like food, to pay for insurance. So is there low income auto insurance?

One option qualified individuals have is purchasing government auto insurance. So what is government auto insurance? While it’s not widely advertised, and the requirements for qualification are strict, a few states have low income auto insurance government assistance programs to help people purchase coverage, despite having a lower income.

Even though government auto insurance plans help ease the financial burden, it is important to always get quotes from multiple sources before deciding on a plan. Looking for more cheap auto insurance rates? Use our FREE quote tool and enter your ZIP code to get started.

Government Auto Insurance

So what exactly is government auto insurance? How do you qualify for and purchase it? Where is it available? These are just a few of the questions you may be asking yourself as you jump into this article.

Not to worry, in the next few sections, we’ll answer these and other questions related to government auto insurance, so you have everything you need to make an informed decision about whether this is the right option for you.

What is government auto insurance?

A recent study shows that a vast majority of lower-income households spend up to 30 percent of their income on auto insurance alone, which is an outrageous amount considering the other expenses they need to pay.  Government auto insurance is one solution.

Government auto insurance is a state-sponsored program that helps lower-income families get the auto insurance that they legally need to be able to drive their car.

These state auto insurance programs can either provide a subsidy to the family to help with their auto insurance bill or it can be a program run entirely by the state government.

However, only three states currently offer some form of low income auto insurance through a government assistance program:

These insurances plans are not sponsored by the federal government, since every state has different laws and requirements when it comes to auto insurance.

The main goal of these programs is to get more drivers on the road legally since the number of uninsured drivers has been on an upward trend for the past decade. In fact, according to the Insurance information Institute, one in eight drivers is currently uninsured.

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Who qualifies for government auto insurance?

Each of the three states that offer government auto insurance have different requirements for who qualifies. However, it should come as no surprise that they’re all financially-based.

Income is the primary deciding factor.

  • A popular measurement of financial eligibility is the poverty income statistic released every year by the federal government
  • An individual may be eligible if they fall below the poverty level, but most states allow the income to be up to 250 percent of the poverty income level

Additionally, family size is taken into consideration, meaning a family of three would need a lower income than a family of six in order to qualify.

At a high level, the qualifications for each program are listed below

CLCA applicants must:

  • Be a resident of California
  • Have a valid driver’s license
  • Be 16 or older
  • Have a good driving record
  • Own a vehicle worth $25,000 or less
  • Be within the income threshold set by the state

Hawaii Financial and SNAP Benefits applicants must:

  • Be a resident of Hawaii
  • Be a U.S. citizen or permanent resident
  • Be within the income threshold set by the state
  • Auto insurance for SSI Receipients – Receive supplemental security income (SSI) benefits or other financial assistance

New Jersey Special Automobile Insurance Policy applicants must:

  • Be enrolled in federal Medicaid with hospitalization

You’ll need to speak with a licensed insurance agent or your state’s government insurance department to find out the details and specifics regarding whether or not you qualify.

Can anyone get government auto insurance?

Unfortunately, not all people who need the insurance will be able to qualify for it. As we noted above, applicants must have a good driving record in order to qualify for the program, and this is in addition to the income requirement, and in the case of the CLCA, the vehicle value requirement of no more than $25,000.

It’s important to keep in mind that even though these government programs are in place to help people get insurance, the cost through the program may still not be affordable for everyone.

Some people simply do not have any money to spare, and most people will decide to put food on the table before paying their auto insurance bill. Even when premiums can be as low as $30 a month (unless you’ve purchased SAIP coverage, in which case it’s a dollar per day), depending on where you live, that may not be affordable for everyone.

Is government auto insurance better than traditional insurance?

Most government policies are fairly limited in terms of coverage. For example the coverage through government programs does not always provide medical coverage for the driver, just the passengers.

The reasoning behind this is that most people who qualify for low-income insurance will qualify for free health insurance through the state (and in some cases this is actually required in order to qualify for the government auto insurance), so the additional medical coverage may not be necessary. This helps keep rates lower as well.

In addition, government auto insurance does not include a number of coverage options. For example, recipients won’t be able to purchase special coverage such as rental car reimbursement, GAP insurance, or roadside assistance.

The three government auto insurance programs available all offer very limited coverage options:

  • CLCA – minimum liability coverage only
  • Hawaii – no fault coverage
  • SAIP – emergency coverage after an accident for brain and spinal cord injuries up to $250,000 and a $10,000 death benefit

Another factor to keep in mind is that anyone with government auto insurance will also have to deal with new people when they have insurance issues, as this insurance is typically issued through a call center.

Are there other government or low income auto insurance programs?

The government-sponsored programs offered by California, Hawaii, and New Jersey are the primary government auto insurance programs available to people with low income. However, there may be other plans available to people if they are employed at a government agency or in the military.

You may be wondering if this means government organizations offer assistance in purchasing insurance. For example, does the Department of Homeland Security (DHS) help with auto insurance? The organizations themselves do not typically help employees purchase auto insurance.

However, most major insurance companies offer discounts to government workers and those in the military, whether they are active or veterans. This is where comparison shopping for the best insurance rate really comes in handy.

Take a look at this table to see some of the government, military, and veteran discounts that may be available to you.

Military, Veteran, Government, and Employment Discounts
Discounts21st CenturyAAAAllstateAmerican FamilyAmeripriseAmicaCountry FinancialEsuranceFarmersGeicoLiberty MutualMetLifeNationwideProgressiveSafe AutoSafecoState FarmThe GeneralThe HanoverThe HartfordTravelersUSAA
Emergency Deploymentx
Federal Employeexxxx
Forward Collision Warningxxxxxxx
Membership/Groupxxxxxxxxxxx
Militaryxxxxxxxxxxx
Military Garagingx
Occupationxxxxxxxxxxxx
Recent Retireesxx
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As you can see, a number of auto insurance companies offer some form of discount related to being a government employee or active or former military. These discounts can help make your coverage more affordable if you don’t qualify for (or don’t want) low income government auto insurance.

When shopping for auto insurance, make sure to provide information about military service, government work, etc., to ensure any of these discounts are applied. This can help you compare quotes based on what you may actually qualify for.

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Government Auto Insurance and Traditional Auto Insurance Coverage

Now that you know some basics about government auto insurance, what about how it compares to traditional auto insurance? Take a moment to read through the next few sections to learn more about how traditional coverage compares to government auto insurance.

How can I get cheap auto insurance?

Insurance companies offer a ton of different discounts depending on each driver’s situation.

A potential insurer can get a discount for buying the policy online, receiving their bill via email, taking a driver’s education course, having a spotless driving record, being a student with good grades, a military veteran, a homeowner and many more scenarios.

We’ve already discussed military discounts, so take a look at this table to see a few of the different discounts insurance companies offer for good driving, being a good student, and more.

Good Student, Good Driver, and Lifestyle Discounts
Discounts21st CenturyAAAAllstateAmerican FamilyAmeripriseAmicaCountry FinancialEsuranceFarmersGeicoLiberty MutualMetLifeNationwideProgressiveSafe AutoSafecoState FarmThe GeneralThe HanoverThe HartfordTravelersUSAA
Claim Freexxxxxxxxxxxxxxxxxxxxxx
Defensive Driverxxxxxxxxxxxxxxxxxxxxxx
Distant Studentxxxxxxxxxxxxxxx
Driver's Edxxxxxxxxxxxxxxxxxxxx
Driving Device/Appxxxxxxxxxxxxxx
Engaged Couplex
Further Educationxxxxxxxxx
Good Studentxxxxxxxxxxxxxxxxxxxxxx
Good Creditxxxx
Low Mileagexxxxxxxxxxxxxxxxxxx
Marriedxxxxxxxxxxxxxx
New Graduatex
Newer Vehiclexxxxxxxxxxxxxxxx
Newly Licensedx
Newlywedsx
Online Shopperxx
Paperless Documentsxxxxxxxx
Paperless/Auto Billingxxxxxxxxxxxxxxxxx
Roadside Assistancexx
Safe Driverxxxxxxxxxxxxxxxxxxx
Students & Alumnixxxxxx
Young Driverxxxxxx
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Again, a number of companies have discounts you may qualify for. Speak to a licensed insurance agent when shopping for auto insurance to find out which discounts they offer that may be available to you. Whatever the case may be, it is important that you look at all possible insurance companies to see which one meets you needs and will give you the best rate overall.

In addition to the discounts available both for being a good driver and for having good credit, your base auto insurance rates may be lower (before the discounts) due to those same two factors.

This is because auto insurance companies weigh both of these factors when adjusting your rates. Take a look at this table, which we’ve populated with data from Quadrant Information Services, to see how your driving record can affect your auto insurance rates.

Insurance Rates by Driving Record
Insurance CompanyClean recordWith 1 accidentWith 1 DUIWith 1 speeding violation
USAA$1,933.68$2,516.24$3,506.03$2,193.25
Geico$2,145.96$3,192.77$4,875.87$2,645.43
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Nationwide$2,746.18$3,396.95$4,543.20$3,113.68
State Farm$2,821.18$3,396.01$3,637$3,186.01
Progressive$3,393.09$4,777.04$3,969.65$4,002.28
Travelers$3,447.69$4,289.74$5,741.40$4,260.80
Farmers$3,460.60$4,518.73$4,718.75$4,079.01
Allstate$3,819.90$4,987.68$6,260.73$4,483.51
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
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As the data shows, your driving record can have a significant affect on your insurance rates. In fact, with a single speeding ticket, your rates could increase between 12 and 24 percent, while a single accident can increase your rates between 20 and nearly 50 percent, and a single DUI can mean increases of between 17 and 127 percent, depending on the insurer.

As we noted, credit can also have an affect on your base auto insurance rates, pre-discounts. Review the data in this table to see how average rates across the country can be affected by your credit score.

Average Rates by Credit Score
Insurance CompanyFairGoodPoor
USAA$2,219.83$1,821.20$3,690.73
State Farm$2,853.00$2,174$4,951.20
Geico$2,986.79$2,434.82$4,259.50
American Family$3,169.53$2,691.74$4,467.98
Nationwide$3,254.83$2,925.94$4,083.29
Farmers$3,899.41$3,677.12$4,864.14
Progressive$3,956.31$3,628.85$4,737.64
Travelers$4,344.10$4,058.97$5,160.22
Allstate$4,581.16$3,859.66$6,490.65
Liberty Mutual$5,604.24$4,388.18$8,802.22
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If you have a good credit score, your rates will be lower than drivers with fair or poor credit scores. In fact, based on the national averages listed in the above table, if you have fair credit, your rates may be between 6 and 31 percent higher than drivers with a good credit score, while if you have poor credit, your rates may increase by between 27 and 127 percent higher than drivers with a good credit score.

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Should I buy government auto insurance?

Government auto insurance is for people who have no other option at their disposal, mostly due to a lack of income. If someone has to pay $100 a month for auto insurance, most low income drivers will likely choose to run the risk of getting caught rather than purchasing coverage, since they can use that extra money for food.

Legally, you need and should have insurance for many reasons. You may be asking how many drivers don’t have auto insurance? The numbers vary by state but don’t get caught yourself without coverage. First of all, if you’re caught driving without auto insurance, you can face hefty fines and may even lose your license.

While the time and the amount of the fine varies by state, they can do a lot of damage and often will be more than the cost of just paying the insurance premium. And if you does not pay your fine, you could even be doing jail time for failure to pay.

Also, if you’re in a serious or fatal accident and don’t have auto insurance, you could be paying for that accident for the rest of their life. If you’re at fault, you’ll be liable for the other person’s medical bills, replacing their car, covering property damage, and more. The cost could be in the hundreds of thousands of dollars, and if a judgment is placed against you, the courts can garnish future wages to pay for the judgment.

However, if you’re looking for low cost full coverage auto insurance, purchasing your policy through one of these government programs may not be the best option for you, as none of them offer full coverage. So what is the cheapest full coverage auto insurance? This varies by state, your personal situation, and other factors we’ve discussed, so the best way to find the cheapest auto insurance is to shop around, compare rates, and look for available discounts.

Bottom Line for Government Auto Insurance

If you live in California, Hawaii, or New Jersey, you have the option to find out if you qualify for purchasing government auto insurance. The bottom line for your insurance is:

  • Only three states offer low income government assistance programs for purchasing auto insurance
  • The qualifications and offerings for these three government auto insurance programs vary significantly
  • If you don’t live in one of these states, don’t qualify, or want different coverage, you can shop around to find affordable rates
  • You may also be able to take advantage of discounts that can help lower your auto insurance rates

Frequently Asked Questions

Still have questions? Read through these frequently asked questions learn more.

Can I get help paying my auto insurance?

As we’ve noted, the only states that offer some assistance in paying for your auto insurance are California, Hawaii, and New Jersey. If you don’t live in those states or qualify for the programs they offer, there aren’t any government assistance options available to you to help you pay for your auto insurance.

If you don’t qualify for one of the three state-funded assistance programs, your best option for finding affordable insurance is to shop around.

Who has the cheapest auto insurance?

As we noted above, rates vary by state, and your individual rates will also vary depending on a number of factors, some of which we already covered (like driving record and credit score). Other factors that can affect your rates include where you live, your age, gender, education level, and more. Your best bet is to shop around and compare rates.

However, as a baseline, we used Quadrant data on the average rates for the ten largest insurers across the country to calculate national average rates, which are listed below.

Average Auto Insurance Rates
Insurance CompanyNational Average
American Family$1,282.72
Travelers$2,173.97
USAA$2,388.05
Farmers$2,549.46
Nationwide$2,908.82
Geico$3,215.01
State Farm$3,260.00
Progressive$3,798.13
Allstate$4,887.95
Liberty Mutual$5,120.76
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Based on the data in this table, the cheapest rates are offered by American Family auto insurance.

Is Geico insurance owned by the government?

While we know this can be confusing because Geico is actually an acronym that stands for Government Employees Insurance Company, the short answer is no, Geico is not owned by the government. It was originally founded to provide affordable insurance to government employees, but was never owned by the government. And today it is a wholly-owned subsidiary of Berkshire Hathaway.

When you’re looking for affordable insurance, if you don’t qualify for (or don’t want) the coverage offered through one of the three available state-funded government assistance programs, you’ll need to shop around. The easiest way to find affordable insurance is to compare rates for FREE is by using your ZIP code.