Anyone who owns and drives a vehicle in most US states should have valid auto insurance. However, the insurance premium can be an additional expenditure and goes into hundreds of dollars per year. This becomes difficult for individuals with low income to manage their finances. But there’s no way of avoiding insurance payments.
So what do you do? You search for affordable auto insurance, something cheap enough to not dent your budget. However, finding suitable low-cost vehicle insurance is easier said than done. After all, the policy should give you some cover and returns if you file a claim.
Furthermore, some states like Hawaii, New Jersey, and California have state-sponsored car insurance for people with low income.
State Sponsored Low Income Car Insurance
CLCA (California Low-Cost Automobile) insurance program provides liability and underinsured coverage to individuals within the 250% federal poverty limit. They also need to own a car valued at less than $25,000 and have a good driving record (no speeding tickets, accidents, traffic collisions, etc.).
Hawaii’s AABD (Assistance to the Aged, Blind and Disabled) program offers free vehicle insurance to people with income 34% below the federal poverty line, people with disabilities, or aged 65 and above.
SAIP (Special Automobile Insurance Policy) in New Jersey provides coverage for emergency medical expenses in case of accidents. There is no liability coverage or protection for vehicle damage.
What if you live in other states of the US? You should search for cheap auto insurance in your city by talking to different insurers.
Tips for Affordable Automobile Insurance for Low-Income Individuals
Generally speaking, insurance companies don’t have policies based on the individual’s income. The premium will be determined based on factors like the car’s make and model, your age, marital status, gender, driving record, the credit score (in some states), etc. Even with a low income, you might end up with a high premium payment.
In fact, the premium will be expensive if the insurer factors in credit score. People with low income might have an issue with making payments on time. This affects the credit score, which then affects the insurance premium.
So how do you look for affordable car insurance without getting into the cycle of delayed payments and credit scores? Let’s find out.
- Get More Quotes
Don’t go with the first insurance company to choose. Don’t limit your comparisons to just two or three insurers. Talk to all major insurers and get a quote from each one. Better yet, find an independent insurance agent so that they can get the quotes for you.
- Opt for State’s Minimum Coverage
States have set regulations for auto insurance. There’s a minimum requirement for liability coverage (bodily harm and property damage). Go with whatever is the state’s minimum so that the premium amount will be less. While it is in no way an ideal option, it is better than not having car insurance and risking legal action.
- Say No to Add-Ons
Comprehensive coverage with add-ons for roadside assistance, calamities, etc., will provide better protection. But these will also increase the premium. Don’t choose add-ons or extra coverage except for the basic car insurance policy. Keep it to a minimum in all ways.
- Ask for Eligible Discounts
Insurance companies have an array of discounts listed for different clients. You need to enquire about the ones you will qualify for. For example, people with a good driving record can get a safe driving discount. Students with good scores can get a good student discount, and so on.
- Increase Deductible
The deductible is what you pay out of pocket in case of accidents or collisions. Increasing the deductible amount will lower the premium as insurers don’t have to pay more when you file a claim. This amount is not reimbursed. But if you don’t get into collisions, you don’t have to pay for any repairs.
Another option is to opt for bundle insurance, where your car insurance is combined with home insurance. The premium amount and coverage are distributed across both properties.
It is definitely possible to get the cheapest car insurance in Wisconsin. Take your time to go through different options and talk to more than one agent. Don’t wait until the last minute to get car insurance. Start early so that you have a couple of months in the existing coverage while you hunt for new low-cost auto insurance. If it’s a new car, start looking for insurance before you buy the car.