Government Auto Insurance: The Affordable Option for Low Incomes

Government auto insurance offers help from the state government paying for car insurance if your rates are too expensive. While government auto insurance offers more affordable rates, it is only available in a few states, including California and Hawaii. To qualify for help with auto insurance payments you must meet certain income requirements.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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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 and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 8, 2021

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Things to Remember

  • Not every state government offers auto insurance assistance.
  • Lower-income households spend up to 30% 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% 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.

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 into our free tool to find affordable government auto insurance quotes near you.

What is government auto insurance?

Basically, it is a public auto insurance option that can offer much cheaper rates than insurance companies. It can be a great low-income car insurance option.

Government auto insurance assistance would be beneficial to low-income families or for backup in tough times. This auto insurance help is only available in three states California, Hawaii, and New Jersey.

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

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

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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. That’s why some states offer help with auto insurance payments; this is especially useful if you need cheap car 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?

If you need help paying auto insurance, one option qualified individuals have is purchasing government auto insurance.

Is government auto insurance right for you?

While it’s not widely advertised and the requirements for qualification are strict a few states have government auto insurance for low-income drivers to help people purchase coverage if they can’t afford it.

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 269-3550
Alaskawww.commerce.alaska.gov1-800-INSURAK (in-state outside Anchorage)
(907) 269-7900 (Anchorage office)
(907) 465-2515 (Juneau office)
Arizona 364-2499
(800) 325-2548 (In Arizona but outside the Phoenix area) 282-9134 or (501) 371-2600 927-4357 (HELP)
(800) 482-4833 (TTY) 894-7855 or (800) 886-7675 297-3800 or (800) 203-3447 674-7300 413-3140 656-2070 or (800) 656-2298 586-2790 or (808) 586-2799 334-4250 814-2420 (Chicago office) or (217) 782-4515 (Springfield office) 622-4461 281-5705 or (877) 955-1212 296-3071 or (800) 432-2484 595-6053 or (502) 564-3630 259-5300 624-8475
Maryland 468-2090 521-7794 or (877) 563-4467 284-8800 or (877) 999-6442 539-1500 or (800) 657-3602 359-3569 or (800) 562-2957 751-4126
Montana 332-6148 or (406) 444-2040 471-2201 872-3234
New 271-2261 or (800) 852-3416
New 292-7272 or (800) 446-7467
New 4ASK-OSI (855-427-5674)
New 342-3736
North 408-1212
North 328-2440 or (800) 247-0560 686-1526 522-0071 or (405) 5210-2828 877-4894 881-6388
Rhode 462-9520
South 737-6160
South 773-3563 741-2241 676-6000 or (800) 578-4677 538-3800 828-3301 371-9741 or (800) 552-7945 562-6900
Washington 727-8000
West 558-3386 266-3585 (Madison) or (800) 236-8517 (statewide) 777-7401 or (800) 438-5768
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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.

How can you get 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 auto insurance payment 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. Keep in mind this doesn’t necessarily include comprehensive coverage or collision coverage, meaning your own vehicle’s damages won’t be covered.
  • 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.


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 those who qualify. 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% 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 insurance will be able to qualify for it based on their incomes.

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. In the case of the CLCA, there is a 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 rates 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.

Are there other ways low-income drivers can save on auto insurance?

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 public 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 auto insurance 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.

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What auto insurance discounts are available for low-income drivers?

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
American Family
Country Financial
Liberty Mutual
Safe Auto
State Farm
The General
The Hanover
The Hartford
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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.

There are also other auto insurance discounts that may be available to you.

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.

How does government auto insurance compare to 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.

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 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 – liability coverage minimums 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.

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How can you get cheap auto insurance?

Insurance companies offer a ton of different auto insurance 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 Free
Defensive Driver
Distant Student
Driver's Ed
Driving Device/App
Engaged Couple
Further Education
Good Student
Good Credit
Low Mileage
New Graduate
Newer Vehicle
Newly Licensed
Online Shopper
Paperless Documents
Paperless/Auto Billing
Roadside Assistance
Safe Driver
Students & Alumni
Young Driver
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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.

What factors affect auto insurance rates for low-income drivers?

In addition to the discounts available for both 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
American Family$2,693.61$3,722.75$4,330.24$3,025.74
State Farm$2,821.18$3,396.01$3,637$3,186.01
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
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As the data shows, an infraction on your driving record can result in a significant hike in your auto insurance rates. People who drive safely save money.

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
State Farm$2,174.00$2,853.00$4,951.20
American Family$2,691.74$3,169.53$4,467.98
Liberty Mutual$4,388.18$5,604.24$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 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.


Is there free auto insurance for low-income people?

Sadly, there isn’t free auto insurance for low-income drivers.

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

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Why should you avoid letting your auto insurance lapse?

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 be greater than the cost of a standard auto insurance rate. 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 car insurance is to shop around, compare rates, and look for available discounts.

Government Auto Insurance: What’s 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.

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 auto insurance is to compare rates for free. Enter your ZIP code into our comparison tool below to compare government auto insurance rates with a standard policy.

What is government auto insurance?

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

#1 – Can I get help paying for 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 – How much is auto insurance for low-income drivers?

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 annual costs for auto insurance rates, which are listed below.

Average Annual Auto Insurance Rates by Company
Insurance CompaniesU.S. Annual Average Rates
American Family$1,282.72
State Farm$3,260.00
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.

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.

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