What You Should Know About Low Income Car Insurance 2018

Low income families can buy low cost, government car insurance in a few states. But, there are ways to find cheap insurance with traditional insurance companies too.

The cost of living in the U.S. is constantly rising, and if you're one of the many families who earn an annual income of $40,000 or less, it may be impossible to stretch your budget to include something like car insurance premiums.

In the past few years, premium rates have continued to climb annually at a rate of 10 to 12%.

Meanwhile the average minimum wage has remained stagnant at $7.25/hour, totaling $15,000/year.

A recent study found that low income households allocate a whomping 30% of their paychecks to their car insurance provider, leaving them little for things such as groceries, medication, rent or mortgage payments.

While driving a vehicle without insurance is illegal in almost every state in the U.S., many individuals risk foregoing coverage in order to pay other bills.

The consequences of driving uninsured are far more costly. Those caught and found liable in an accident can face fines, license suspension, jail time, medical bills, property damages, and lawsuits.

Simply paying for an insurance premium is easier said than done for those who don't experience financial restrictions.


Table of contents
Why are some drivers uninsured?
Average annual car insurance premium in each state
What is government car insurance?
Which states offer low income car insurance programs?
California's Low Cost Auto Insurance Program (CLCA)
New Jersey's Special Automobile Insurance Policy (SAIP)
Hawaii's Low Cost Disability Auto Insurance Program
Non-Government Related Car Insurance Programs for Low Income Families
CURE
The Maryland Automobile Insurance Fund
Insurance companies that offer car insurance for low income families
Why are some drivers uninsured?
The Consumer Federation of America found that the 5 largest insurance providers Allstate, Progressive, State Farm, Geico, and Farmers, don't offer premiums under $500/year for those living in the lowest income areas.
The Consumer's director of financial services, Tom Feltner, challenges that, "Higher insurance premiums act to deny [low-income] Americans economic opportunity and also help to explain why so many low-income drivers drive without insurance."

Average annual car insurance premium in each state
State Average Annual Premium
Alabama $2090
Alaska $1605
Arizona $635
Arkansas $426
California $1236.06
Colorado $1186
Connecticut $1694
Delaware $1874
Florida $1098
Georgia $1304
Hawaii $432
Idaho $1035
Illinois $500
Indiana $456
Iowa $828
Kansas $1132
Kentucky $1885
Louisiana $2283
Maine $883
Maryland $2223
Massachusetts $1350
Michigan $1399
Minnesota $1485
Mississippi $1690
Missouri $438
Montana $1624
Nebraska $1001
Nevada $1592
New Hampshire $868
New Jersey $2228
New Mexico $1316
New York $1516
North Carolina $687
North Dakota $1251
Ohio $417
Oklahoma $1229
Oregon $1134
Pennsylvania $585
Rhode Island $1381
South Carolina $1539
South Dakota $921
Tennessee $1015
Texas $1766.22
Utah $991
Vermont $851
Virginia $2737
Washington $534
West Virginia $1388
Wisconsin $733
Wyoming $989
The Insurance Information Institute argues that these providers aren't intentionally targeting these groups of people, but rather their rates are affected by a number of risk factors including car usage, theft, accidents, and repair costs which tend to be higher in low income neighborhoods.
But, how can low income individuals avoid living in these areas when it's most likely all they can afford of rent and mortgage?

This unfair pricing within the industry have pushed a few states to fund government auto insurance for their low income residents.

What is government car insurance?
The goal of government sponsored car insurance programs for low income families is to keep drivers covered and roads secure not just in certain neighborhoods, but throughout a state.
Government public auto insurance may be an option for low income families or individuals with disabilities and are sponsored by federal or local governments.

Source -https://insurify.com/blog/car-insurance/what-you-should-know-about-low-income-car-insurance/