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.

Full Bio →

Written by

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 ex...

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Nov 16, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to Remember

  • Not every state government offers car insurance assistance.
  • Lower-income households spend up to 30 perfect of their income on auto insurance alone.
  • An individual may be eligible if they fall below the poverty level, but most states allow the qualifying income to be up to 250 perfect of the poverty income level.

If you are going through financial troubles and are worried about paying for auto insurance, then you may be interested in government auto insurance.

What is government auto insurance? Basically, it is a public auto insurance option that can offer much cheaper rates than insurance companies.

Government auto insurance assistance would be beneficial to low-income families or for backup in tough times. These cheap auto insurance programs are available in three states—California, Hawaii, and New Jersey. 

You may be able to find cheap auto insurance rates or income-based auto insurance if you’re willing to research options.

Government assistance for auto insurance or help paying for car insurance is not available in every state, but keep reading to learn more about these programs and the requirements for receiving government auto insurance.

There is a minimum state auto insurance coverage requirement in most states so that all parties are protected in the event of an accident.

Before you buy government auto insurance, it pays to shop around.

If you are looking for auto insurance on a fixed income, we can help. Just enter your ZIP code in our FREE tool to find affordable government auto insurance quotes near you.

Table of Contents

Do you need help with auto insurance payments?

Each state has its own laws governing how much insurance is required, but in general, it’s illegal to drive without auto insurance.

Unfortunately, we all need money to pay auto insurance, and auto insurance rates can be expensive. 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 cheap auto insurance for low-income people?

One option qualified individuals have is purchasing government auto insurance.

More About 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 if they can’t afford it.

Even though government auto insurance plans help ease the financial burden, it’s important to always get quotes from multiple sources before deciding on a policy.

Find your state’s insurance contact information and website below. This will be a good start in finding out all about your options from your state directly.

U.S. State Official Insurance Department Contact Information
StatesWebsitePhone Number
Alabamawww.aldoi.gov(334) 269-3550
Alaskawww.commerce.alaska.gov1-800-INSURAK (in-state outside Anchorage)
(907) 269-7900 (Anchorage office)
(907) 465-2515 (Juneau office)
Arizonahttps://insurance.az.gov(602) 364-2499
(800) 325-2548 (In Arizona but outside the Phoenix area)
Arkansasinsurance.arkansas.gov(800) 282-9134 or (501) 371-2600
Californiawww.insurance.ca.gov(800) 927-4357 (HELP)
(800) 482-4833 (TTY)
Coloradowww.colorado.gov/pacific(303) 894-7855 or (800) 886-7675
Connecticutwww.ct.gov/cid(860) 297-3800 or (800) 203-3447
Delawareinsurance.delaware.gov(302) 674-7300
Floridawww.floir.com(850) 413-3140
Georgiawww.oci.ga.gov(404) 656-2070 or (800) 656-2298
Hawaiicca.hawaii.gov/ins(808) 586-2790 or (808) 586-2799
Idahodoi.idaho.gov(208) 334-4250
Illinoisinsurance.illinois.gov(312) 814-2420 (Chicago office) or (217) 782-4515 (Springfield office)
Indianawww.in.gov/idoi(800) 622-4461
Iowaiid.iowa.gov(515) 281-5705 or (877) 955-1212
Kansaswww.ksinsurance.org(785) 296-3071 or (800) 432-2484
Kentuckyinsurance.ky.gov(800) 595-6053 or (502) 564-3630
Louisianawww.ldi.la.gov(800) 259-5300
Mainewww.maine.gov/pfr/insurance(207) 624-8475
Marylandhttp://www.mdinsurance.state.md.us(410) 468-2090
Massachusettswww.mass.gov/orgs/division-of-insurance(617) 521-7794 or (877) 563-4467
Michiganwww.michigan.gov/difs(517) 284-8800 or (877) 999-6442
Minnesotamn.gov/commerce(651) 539-1500 or (800) 657-3602
Mississippiwww.mid.ms.gov(601) 359-3569 or (800) 562-2957
Missouriinsurance.mo.gov(573) 751-4126
Montanahttps://csimt.gov(800) 332-6148 or (406) 444-2040
Nebraskadoi.nebraska.gov(402) 471-2201
Nevadadoi.nv.gov(888) 872-3234
New Hampshirewww.nh.gov/insurance(603) 271-2261 or (800) 852-3416
New Jerseywww.state.nj.us/dobi(609) 292-7272 or (800) 446-7467
New Mexicowww.osi.state.nm.us(855) 4ASK-OSI (855-427-5674)
New Yorkwww.dfs.ny.gov(800) 342-3736
North Carolinawww.ncdoi.com(855) 408-1212
North Dakotawww.nd.gov/ndins(701) 328-2440 or (800) 247-0560
Ohiowww.insurance.ohio.gov(800) 686-1526
Oklahomawww.ok.gov/oid(800) 522-0071 or (405) 5210-2828
Oregondfr.oregon.gov(888) 877-4894
Pennsylvaniawww.insurance.pa.gov(877) 881-6388
Rhode Islandwww.dbr.state.ri.us/divisions/insurance(401) 462-9520
South Carolinadoi.sc.gov(803) 737-6160
South Dakotadlr.sd.gov/insurance(605) 773-3563
Tennesseewww.tn.gov/commerce(615) 741-2241
Texaswww.tdi.texas.gov(512) 676-6000 or (800) 578-4677
Utahinsurance.utah.gov(801) 538-3800
Vermontwww.dfr.vermont.gov(802) 828-3301
Virginiawww.scc.virginia.gov/boi(804) 371-9741 or (800) 552-7945
Washingtonwww.insurance.wa.gov(800) 562-6900
Washington D.C.disb.dc.gov(202) 727-8000
West Virginiawww.wvinsurance.gov(304) 558-3386
Wisconsinoci.wi.gov(608) 266-3585 (Madison) or (800) 236-8517 (statewide)
Wyomingdoi.wyo.gov(307) 777-7401 or (800) 438-5768
Get Your Rates Quote Now

Compare RatesStart Now →

If you’re looking for more cheap auto insurance rates, use our FREE quote tool to compare multiple insurance companies.

Auto Insurance on a Fixed or Low-Income

A recent study shows that a vast majority of lower-income households spend up to 30% 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 for finding financial assistance with auto insurance.

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

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

  • If you’re looking to purchase California auto insurance, the government auto insurance program is known as the Low Cost Auto Insurance Program (CLCA); it enables qualified drivers to purchase minimum liability coverage in order to ensure they meet state requirements to legally drive.
  • If you’re looking for Hawaii auto insurance, the government auto insurance program is offered by the state’s financial and SNAP benefits program, through which qualified individuals may be able to obtain free no-fault insurance.
  • If you’re looking to purchase New Jersey auto insurance, the Special Automobile Insurance Policy (SAIP) is the government auto insurance program offered by the state; qualified drivers can purchase limited insurance coverage for a dollar per day, totaling $365 per year.

These insurance 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.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Who qualifies for government auto insurance?

Are there places that help with auto insurance?

Each of the three states that offer government auto insurance rates has different requirements for who qualifies. However, it should come as no surprise that eligibility is financially based.

Income is the primary deciding factor.

  • A common 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 applicant’s 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.

The broad 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 Recipients – 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 (and with SAIP coverage, it costs a dollar per day), depending on where you live, that may not be affordable.

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 may provide medical coverage for the passengers but not the driver.

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 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 likely have to deal with a new person every time 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 for low-income drivers.

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 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 duty or veterans. This is where comparison shopping for the best insurance rates 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 Offered by Company
CompaniesEmergency DeploymentFederal EmployeeForward Collision WarningMembership/GroupMilitaryMilitary GaragingOccupationRecent Retirees
21st Century
AAAx
Allstatexx
American Family
Ameriprisex
Amicax
Country Financialxx
Esurancexxx
Farmersxxx
GEICOxxxxx
Liberty Mutualxxxxxx
MetLifexxxxx
Nationwidexxx
Progressivex
Safe Autox
Safecoxxx
State Farmx
The Generalx
The Hanoverxx
The Hartfordxxxx
Travelersxx
USAAxx
Get Your Rates Quote Now

Compare RatesStart Now →

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.

There are also other auto insurance discounts that may be available to you. See the video below from Shine Insurance for the most common auto insurance discounts.

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.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Government Auto Insurance vs. Traditional Auto Insurance Coverage

Now that you know some basics about government auto insurance, how does it compare 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 you could be eligible for.

A customer could get a discount for buying their 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, or a homeowner, and there are 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 Offered by Company
Discounts Offered21st 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
Get Your Rates Quote Now

Compare RatesStart Now →

Most companies have discounts you may qualify for. Speak to a licensed insurance agent when shopping for auto insurance to find out which discounts may be available to you.

Whatever the case may be, it’s important that you look at all possible insurance companies to determine which ones can meet your needs and which offer the cheapest rates.

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 features data from Quadrant Information Services, to see how your driving record can affect your auto insurance rates.

Average Annual Auto Insurance Rates by Driving Record
Insurance CompaniesAverage Annual Rates with a Clean recordAverage Annual Rates with One AccidentAverage Annual Rates with One DUIAverage Annual Rates with One 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
Get Your Rates Quote Now

Compare RatesStart Now →

As the data shows, an infraction on your driving record can result in a significant hike in your auto 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. A single DUI could cause an increase of 17 to 127 percent, depending on the insurer.

As we noted, credit can also have an effect 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 Annual Auto Insurance Rates by Credit Score
Insurance CompaniesAverage Annual Rates with Good CreditAverage Annual Rates with Fair CreditAverage Annual Rates with Poor Credit
USAA$1,821.20$2,219.83$3,690.73
State Farm$2,174.00$2,853.00$4,951.20
GEICO$2,434.82$2,986.79$4,259.50
American Family$2,691.74$3,169.53$4,467.98
Nationwide$2,925.94$3,254.83$4,083.29
Progressive$3,628.85$3,956.31$4,737.64
Farmers$3,677.12$3,899.41$4,864.14
Allstate$3,859.66$4,581.16$6,490.65
Travelers$4,058.97$4,344.10$5,160.22
Liberty Mutual$4,388.18$5,604.24$8,802.22
Get Your Rates Quote Now

Compare RatesStart Now →

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 six and 31 percent higher than drivers with good credit scores.

If you have poor credit, your rates may be anywhere from 27 to 127 percent higher than the rates of drivers with good credit scores.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Is there free auto insurance for low-income people?

Though nothing is free, contact your state program’s office to find out about your options. Government auto insurance is for people who have no other option at their disposal, mostly due to a lack of income.

If auto insurance costs $100 a month, some low-income families will likely choose to run the risk of getting caught rather than purchasing coverage, since they can use that extra money for food or other necessities.

Legally, you need and should have insurance for many reasons. You might be wondering, how many drivers don’t have auto insurance? The numbers vary by state, but don’t get caught 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 amount of the fines vary by state, they can quickly add up to being greater than the cost of a standard auto insurance premium. And if you don’t pay the fines, you could end up serving jail time.

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 your 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 your future wages to pay for it.

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.

What is government auto insurance?: The Bottom Line

If you live in California, Hawaii, or New Jersey, you may qualify for government auto insurance. The bottom line for your insurance is:

  • 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: What is government auto insurance?

Did we miss anything? Read through these frequently asked questions to learn more.

#1 – 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 don’t 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.

#2 – Who has the cheapest auto insurance?

Rates vary by state, and your individual rates also vary depending on a number of factors (such as your 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 10 largest insurers across the country to calculate national average rates, which are listed below.

Average Annual Auto Insurance Rates by Company
Insurance CompaniesU.S. Annual Average Rates
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
Get Your Rates Quote Now

Compare RatesStart Now →

Based on the data in this table, the cheapest rates are offered by American Family auto insurance.

If you are in the military or a veteran, USAA auto insurance may have affordable auto insurance rates for you and your family.

#3 – Is Geico Insurance owned by the government?

We know this can be confusing because Geico is actually an acronym that stands for Government Employees Insurance Company.

However, Geico Insurance is not owned by the government. It was originally founded to provide affordable insurance to government employees, but was never owned by the government.

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 auto insurance is to compare rates for FREE by entering your ZIP code into our comparison tool below.