You need car insurance to legally drive a vehicle. Unfortunately, car insurance can be expensive. Low income individuals are often stuck paying a particularly heavy burden for car insurance.

Do people with low income qualify for affordable car insurance? Are there government-subsidized auto insurance plans or programs available for certain individuals and families? Today, we’re answering all your question about car insurance for low income families and individuals.

Most States Have Subsidized Car Insurance Plans for Low Income Individuals and Families

Low income families in the United States qualify for a number of different benefits. Some states have special car insurance plans specifically available to low income families.low income auto insurance

These so-called “government insurance plans” can significantly reduce the burden on low income families and individuals. These state-sponsored programs help individuals get the car insurance they legally need in order to drive a vehicle.

Specific programs vary from state to state: some states provide a subsidy to low income families, for example. That means you pay the same car insurance rates as anyone else, but you receive a special subsidy – like a certain amount added to your tax refund – to ease the burden of car insurance.

Other states have fully state-sponsored car insurance programs – which are basically insurance companies run by the state government.

California, for example, introduced its Low Cost Automobile Insurance Program (CLCA) in 1999 to provide affordable rates to eligible drivers. New Jersey has a program called the Special Automobile Insurance Policy (SAIP) while Hawaii has its low cost disability auto insurance program available through the Hawaii Department of Commerce and Consumer Affairs. With these programs, insurance premiums are capped at around $390 per year or less – or around $30 per month.

Don’t expect to see any federal insurance plans: states vary widely in terms of insurance requirements, which is why low income car insurance programs are run by individual states.

Who Qualifies for Low Income Car Insurance Programs?

You need to meet certain requirements to qualify for low income car insurance programs. First and most importantly, you’ll need to be at or below a certain annual income. You’ll also need to have a good driving record. Plus, most programs require you to have an affordable vehicle – like a vehicle worth less than $20,000.

Requirement 1) Low Income Status

Obviously, “low income” status varies widely between states. A family considered “low income” in California might be well above the poverty line in a state with a lower cost of living – like Mississippi.

Understandably, states have vastly different qualification requirements for low income car insurance plans.

Generally speaking, however, you qualify for low income car insurance if your insurance payment is particularly high when compared to your income.

The important thing to remember is that you don’t have to be close to the poverty line to qualify for low income car insurance programs! Some states require you to be at or below the poverty line. Other states, however, allow drivers to access low income car insurance plans even if they earn up to 250% of the poverty line income.

As a general guideline, approximately 12.7% of Americans are considered to be living in poverty, according to the U.S. Census Bureau’s 2016 estimates. 43.1 million Americans were living in poverty in 2016.

The United States Department of Health and Human Services issues different poverty lines based on your annual income in the lower 48 states (plus Washington DC), with separate limits for Alaska and Hawaii.

In 2017, for example, the poverty line for a four person family living in the lower 48 states was $24,600.
The poverty line is set at $30,750 for Alaska and $28,290 for Hawaii.

For single individuals, the poverty line is $12,060 per year in the lower 48, or $15,060 in Alaska and $13,860 in Hawaii.

As mentioned above, you don’t need to be at or below the poverty line to qualify for low income car insurance in many states. Some states will allow you to earn up to 250% of this amount while still qualifying for low income insurance plans.

Requirement 2) Good Driving Record

You might qualify for low income car insurance based on your low income status. However, you might get rejected due to a poor driving record. Virtually all states require drivers to have a good driving record in order to qualify for special discount insurance rates.

Requirement 3) An Economical Vehicle

Most state plans also require you to have an affordable, economical vehicle in order to qualify for car insurance. Your vehicle cannot be valued over a certain amount – like between $20,000 and $25,000 – in order to qualify.

Other Requirements

Some states have additional requirements. Under California’s popular Low Cost Automobile Insurance Program (CLCA), for example, you’re required to be at least 19 years old, have no unpaid loans on your vehicle, and have a current driver’s license. Under CLCA, insurance plans are capped at $388 per year.

New Jersey’s SAIP, meanwhile, requires you to be currently enrolled in Federal Medicaid with Hospitalization in order to qualify. Insurance premiums are capped at $360 (if paying upfront) or $365 per year (paid in two installments).


Low income individuals and families spend up to 30% of their income on car insurance alone. These individuals pay a particularly heavy burden to insure their vehicles. Fortunately, there are options: some states have government-subsidized car insurance plans for low income individuals. Other states make it easy for low income drivers to maintain affordable, bare-bones insurance policies when money is tight.

Compare car insurance quotes online today and discover if you qualify for low income car insurance plans in your state.