Government low-cost auto insurance programs

Why so few states have low-cost programs

Most states do not offer a separate low-cost auto insurance product. Drivers who cannot find a policy are instead often served by a shared plan, usually called an assigned risk plan. California and New Jersey are the main exceptions, each with a program set up by state law. Hawaii also has a rule that provides basic coverage for some public assistance recipients, covered below.

These programs are designed to get more people legally insured at a price they can afford. The trade-off is limited coverage: each one pays much less than a typical standard policy, so it is important to understand what is and is not covered before you rely on one.

California Low Cost Automobile Insurance Program (CLCA)

The California Legislature created this program in 1999 under California Insurance Code section 11629.7. It is sponsored by the California Department of Insurance and sold through the program's website and participating agents.

Who qualifies in California

According to the program, you must:

• be at least 16 years old, and legally emancipated if under 18;
• have a valid California driver's license;
• own a vehicle worth $25,000 or less;
• meet the income guidelines for your household size; and
• have a good driving record, or be a new driver.

The Department of Insurance notes that new drivers without a long driving history can still take part.

California income limits

The program publishes a maximum annual household income by household size. These were the limits shown on the program's site when we checked in October 2026. The program updates them, so check the current table before you apply.

The program lists limits for larger households too.

What counts as a good driving record

In the previous 3 years, the program requires:

• no more than 1 at-fault accident involving only property damage, or no more than 1 point for a moving violation;
• no at-fault accidents involving injury or death; and
• no felony or misdemeanor convictions for a Vehicle Code violation.

What the California low-cost policy covers

The optional coverages cost an extra $38 to $81 a year. The program says the basic policy meets California's financial responsibility law.

It does not pay for theft of or damage to your own car, and liability coverage does not pay your own medical bills or repairs. Those limits are low compared with the cost of a serious crash, so if you cause one, costs above the limits could fall on you. See liability coverage and uninsured motorist coverage.

What the California program costs and how to pay

Annual premiums range from $199 to $986, depending on the county. You can pay the full premium at once, or pay 20% down followed by 7 installments, with a $4.00 transaction fee on each installment. The program also says some drivers with a longer licensing history and a good record may qualify for discounts. Read more about payment options.

New Jersey Special Automobile Insurance Policy (SAIP)

New Jersey's Special Automobile Insurance Policy is set up by state law (N.J.S.A. 39:6A-3.3) and overseen by the Department of Banking and Insurance (DOBI). It is often called "dollar-a-day" insurance because of its price.

Who qualifies in New Jersey

The policy is for people currently enrolled in federal Medicaid with hospitalization. DOBI notes that not every Medicaid program qualifies, and an insurance producer can check eligibility using your Medicaid ID number. Other rules:

• You must show Medicaid enrollment when the policy is first written and at each renewal.
• Drivers whose license or vehicle registration is suspended or revoked cannot get the policy.
• One policy covers one car, but all household members enrolled in Medicaid can be covered under it.
• You need driver's licenses for all drivers, the vehicle registration, and a Medicaid ID card for each person to be covered.

According to the New Jersey Office of the State Comptroller, there were 51,661 SAIP policyholders as of December 2022.

What the New Jersey SAIP covers

The statute also says the policy does not include uninsured or underinsured motorist coverage. Because there is no liability coverage, the SAIP does not pay anyone you injure or whose property you damage.

What the SAIP costs

The policy costs $360 a year paid up front, or $365 paid in 2 installments. You can buy it through most insurance agencies, or call the Personal Automobile Insurance Plan's customer service line at 1-800-652-2471 to find a producer.

New Jersey's Basic Policy

New Jersey also offers a Basic Policy, a lower-cost option that is not limited to Medicaid enrollees. DOBI points drivers with few or no assets who are not on Medicaid toward it, and its buyer's guide describes the coverage as:

• personal injury protection of $15,000 per person, per accident, plus up to $250,000 for certain serious injuries;
• property damage liability of $5,000 per accident; and
• no bodily injury liability, although $10,000 for all persons per accident is available as an option.

The Basic Policy leaves you without liability coverage for injuries you cause unless you add the option. Our personal injury protection guide explains how PIP works.

Hawaii: coverage for public assistance recipients

Hawaii's insurance rules, published by the Department of Commerce and Consumer Affairs, provide basic coverage through the state's joint underwriting plan for licensed drivers who receive public assistance from the state Department of Human Services or Supplemental Security Income. The Department of Human Services issues a certificate of eligibility, which the plan treats as payment in full for basic coverages. Applicants must be the sole registered owner of the car and must first use up any paid coverage they already have. Ask the Hawaii Department of Human Services or the Hawaii Insurance Division how to apply, as the rules do not explain the process for consumers.

Programs compared

How to apply for a state low-cost car insurance program

1. Check eligibility. Compare your income, Medicaid or public assistance status, vehicle value and driving record with the program's rules.
2. Gather documents. Typically your driver's license, vehicle registration, proof of income or benefits, and details of any current insurance.
3. Apply through the official channel. In California, start with the eligibility questionnaire on the program's website or call 1-866-602-8861. In New Jersey, go to an insurance agency or call 1-800-652-2471.
4. Compare with a standard quote. For some drivers a regular policy with discounts costs little more and covers much more. See shopping at renewal.
5. Choose a payment plan you can keep up. A cancelled policy leaves you uninsured.
6. Recheck eligibility at renewal. Income, Medicaid status and driving record are checked again.

If your state has no low-cost program

Most drivers do not have access to a state program, but other routes can lower the price: comparing quotes, claiming discounts, raising your deductible if you have savings, and dropping coverage you do not need after reviewing your coverage. Drivers who are turned down by several insurers can often get a policy through their state's assigned risk plan; a licensed agent or your state insurance department can help. Our saving money hub puts these steps in order.