How to Get Low Income Car Insurance
To legally drive a vehicle in the US you must have car insurance. However, this requirement can be challenging for many low income households to meet. With that in mind, there are a variety of programs available to help low income families find automobile insurance options that will work with their budget.
When considering insurance, make sure that it is adequate for your use. There is no point in taking out insurance if it will not deliver on what you need should you get in a accident.
State Car Insurance Assistance Programs
California, Hawaii and New Jersey offer programs to low income households that provide assistance in obtaining affordable car insurance. The programs offered by these states operates separately of the other guarantees required by states, such as those that ensure drivers with a less than perfect driving record are still able to obtain insurance.
Maryland combined their coverage program designed to help those with poor driving history obtain insurance with services for low-income households. Additional programs are being considered by other states and cities.
It is important to note that these programs come with a number of restrictions. While income limits are the most notable qualification, applicants must also have a current driver’s license. Additionally, some states, such as California, limit the value of participating vehicles.
Check with your local DOL/DMV for recommendations on low income vehicle insurances or alternatively speak to your local community action agency as they may be able to point you in the right direction.
Other State Benefits
If your household qualifies for cash assistance from the state, you may be able to direct all or a portion of that benefit towards your car insurance payment. While this benefit isn’t specifically designed to cover automobile insurance, it is meant to help with the expenses associated with daily living. Further, if you qualify for other benefits, such as assistance with purchasing food, you may be able to redirect some of the funds you would have spent in that category to covering an insurance bill.
Charities and Churches
In some cases, assistance may be available from local nonprofit organizations. Low income households may be eligible to receive general financial assistance, resulting in funds that can be applied to any area of need, while other organizations may have specific offerings. Again, if you are able to find assistance on other expenses, such as food or rent, you may be able to redirect some of your own funds to manage a car insurance payment.
One of the easiest ways to find more affordable car insurance is to shop around. There are a wide variety of insurers in the marketplace, and they may all offer you a different rate. Instead of sticking with a particular provider, consider getting quotes from multiple companies. You may find suitable coverage from a new provider at a more affordable price.
Change Your Coverage
One way to lower the cost of insurance is to make changes to your current coverage. For example, it may not be necessary to maintain full coverage insurance on your car if you are no longer making payments on it. Automobile insurance providers will be able to tell you what the minimum requirements are for your state, and you can make changes accordingly. If you are still paying a lender back for your vehicle, your options regarding any changes to your insurance may be limited.
Tips to reduce insurance costs
If you are on a low income, every dollar saved towards your monthly budget is important. Below are a few tips on how to potentially reduce your car insurance bill.
Pay in bulk – Most insurers will provided a discount if you pay your premium upfront annually. If you currently don’t have the cash to do this, think about bill smoothing. This is a budgeting technique to help you handle large charges.
If it makes sense, consider taking out a low or no interest loan or advance to help take advantage of an upfront payment. Be sure that this makes financial sense and it helps you save money versus getting into debt.
Ask for usage discounts – If you rarely use your vehicle or don’t rack up much mileage each year, ask for what low-mileage discounts they provide. If your insurer doesn’t offer low mileage discounts, consider looking for a new insurer.
Take a higher deductible – By increasing your deductible you can save an enormous amount on your rate. If you have a great driving history with the good record of no accidence, this may be an option for you.
What kind of car do you have? – If you have a late model vehicle, it may make sense to reduce the cover on the vehicle to the bare minimum - Especially if it would be cheaper to buy a new used car versus repairing.
Stay on top of your cover – Try to review your insurance at least once a year and if you hear of or see another insurer providing a better package, ask your insurer to match.
All of the above examples are great ways for low income earners to reduce or get car insurance.