State-funded best auto coverage options backed by the US government
Are you caught in the circle of digging the internet looking for affordable auto insurance policies? Quit further confusion! We are here to help you choose the best affordable auto insurance policy.
In this blog, we will explore different government auto insurance options available, learn about the application process, and understand the possibilities of state-funded best auto coverage options backed by the U.S. government.
What is government auto insurance?
Talking about auto insurance in the U.S., it is a must-have irrespective of the type of car or a person’s lifestyle.
During your research, you might have come across the term “Government auto insurance” but many individuals don’t know if this is a completely free insurance policy or an affordable option.
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This particular insurance program is also referred to as public auto insurance and they are designed to help families and individuals with low income to find affordable insurance.
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These insurance policies offer drivers lower rates compared to traditional insurance companies. Each state has its own requirements and eligibility criteria for the drivers.
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As of now, these programs are only offered in California, Hawaii, and New Jersey. In the coming sections, we will discuss more on what is covered and compare it with the traditional policies.
Top 3 government auto insurance options
By now, you would have an understanding that government auto insurance aims to assist low-income drivers and enhance their safety on the road. Below are the states that go above and beyond to ensure that their residents have access to affordable insurance policies.
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California auto insurance program (CLCA)
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Compared to other state insurance programs, California takes the lead in providing state-funded auto coverage.
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California auto insurance provides such affordable insurance programs through the California low-cost auto insurance program.
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This program is specifically designed to cater to those individuals who find the cost of auto insurance as a financial burden.
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The coverage that is offered under this state-funded insurance option includes liability insurance which is an essential component of any auto insurance policy.
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Liability insurance coverage primarily pays for property damage and/or injuries caused to another person during an accident in which you are at fault.
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Government-sponsored insurance will be comparatively cheaper than the average annual cost of private insurance.
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It is roughly $1,034 in California, according to the National Association of Insurance Commissioners (NAIC).
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In California, the maximum allowable income will vary based on your household size:
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→ 1 person: $32,200
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→ 2 people: $43,550
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→ 3 people: $54,900
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→ 4 people: $66,250
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→ 5 people: $77,600
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New Jersey special automobile insurance policy (SAIP)
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Do you belong to the low-income residents of New Jersey, here’s an affordable way to get your car insurance.
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SAIP is available to Medicaid-eligible drivers and provides enough medical coverage in case of an accident.
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To qualify, you have to be currently uninsured and also be enrolled in a Medicaid program that includes hospitalization coverage.
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Although SAIP is not a comprehensive auto insurance plan, it ensures access to essential medical coverage, making it a valuable option for those with limited resources.
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On the whole, apart from providing comprehensive coverage, SAIP ensures that it protects the health and well-being of the drivers.
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Hawaii’s no-fault auto insurance
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Hawaii has a no-fault system when it comes to car accidents, especially for personal injury protection coverage.
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If you’re a resident of Hawaii, you are required to carry basic car insurance that is inclusive of personal injury protection benefits.
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If there is an injury during a ride your PIP benefits aid in paying for your injuries irrespective of who is at fault.
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They have an efficient system of providing quicker solutions to address the injuries caused during an accident.
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In addition to this, you will be able to get free car insurance if you’re enrolled in the state’s Aged, Blind and Disabled (AABD) program.
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Government auto insurance VS. Private auto insurance policies
| Government auto insurance | Private auto insurance |
|---|---|
| 1) They are operated by the government at a state level. The state plays a major role in providing and overseeing these insurance options. They are subject to state regulations that include specific eligibility criteria and coverage requirements. |
1) You can figure out by the name that this type of auto insurance coverage is offered by private insurance companies. They are owned by private insurance companies and they have the autonomy to set the rates, terms, and coverage types. |
| 2) As discussed earlier, the aim of government auto insurance policies is to cater to low-income individuals to offer affordable options. | 2) Private insurance companies offer a wide range of policies, so costs can vary. Hence, they can be quite expensive than state-funded policies, especially for high-risk drivers. |
| 3) Due to their affordability feature, the government programs typically provide basic coverage that has the ability to meet the state’s minimum requirements. Compared to private insurance companies, options are not vast |
3) Due to varied costs and policy amounts, private insurance companies offer a variety of coverage options including liability, collision, comprehensive, uninsured motorist coverage, and more. In addition to this policyholders also have the option to tailor their policy |
| 4) Their eligibility and requirements are not really strict and they are accessible to individuals who face financial constraints. | 4) While they have stricter eligibility criteria, they are generally available to a huge population with different options. |
Do you qualify for government auto insurance?
The eligibility criteria for auto insurance options vary as per each state and the application process also differs.
It is important for you to understand each state’s requirements before finalizing your decision. We recommend you visit the State’s official website to understand the process.
However, in order to determine if you meet the basic eligibility requirements, we have researched some factors that influence your eligibility. Here it goes:
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Income level
Most of the government auto insurance programs target only low-income individuals or households. Every state’s income threshold depends on its set policies.
As proof of qualification, you need to be able to provide your income documents as a supporting document to qualify for government auto insurance.
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Driving record
Some state-funded programs also take into consideration your driving history. For instance, California auto insurance requires you to have a good driving record as part of your eligibility.
If you’re used to maintaining a safe driving record, then keep it up! You are highly likely to be eligible for government auto insurance
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Medicaid eligibility
Some state-funded programs like New Jersey special automobile insurance policy, are eligible only for Medicaid-eligible drivers. So, if you’re in New Jersey make sure to note this point.
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Residency
This is a no-brainer and obvious! You need to be a resident of the state that is offering an auto insurance program, in order to qualify for affordable insurance.
So, if you need to be eligible for the California auto insurance program, make sure that you are either an existing resident or planning to become a resident of the California state.
2-step simplified application process
Getting government auto insurance requires the residents to go through an application process. Here’s an overview of the entire process that you might possibly encounter:
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Documentation
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Maintain a stack of documents that you will need during the application process. This includes your proof of residency, driving/vehicle details, and other valid identification documents.
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Make sure that you have all the documents organized before starting the application process.
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Review and submit
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Once you have all the documents in place, make sure to review them and follow the State’s requirements to submit your application.
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You can submit your application via designated channels such as government websites, or government-authorized insurance offices.
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What is covered under the Government auto insurance?
There are two types of coverage that state-funded insurance covers:
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Liability coverage
This requirement is basic and mandatory in most of the U.S. states. It is moreover a legal requirement that can be used to compensate others for their injuries or property damage when you’re at fault.
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Medical coverage
Programs like the New Jersey special automobile insurance policy (SAIP) provide a good amount of medical coverage for medicaid eligible drivers. This offers essential protection during the event of an accident.
Limitations of government auto insurance
While the government offers policies that provide required basic coverage that is needed for a car. They also come with certain drawbacks such as:
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Limited coverage
State-funded programs offer minimum coverage options such as liability coverage. But they don’t provide coverage options such as collision, or uninsured motorist coverage.
So, if you’re in need of additional coverage, you may need to go for comprehensive protection.
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Eligibility Restrictions
Government auto insurance is not for everyone and the eligibility criteria will have certain restrictions.
Worry not! Even if you don't qualify for government auto insurance, you can still protect your ride. Get a quick quote and save on your auto insurance.
For example, if you’re from a high-income group, or have a high-end vehicle, you may not qualify for government auto insurance.
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Varied coverage by state
The extent of coverage that is provided by every state is not the same, some states offer comprehensive programs whereas others might offer only minimum requirements.
Closing notes
If you’re looking for affordable auto coverage and also protect your ride, government auto insurance would be the ideal option.
Exemplified programs like California auto insurance aid individuals with financial constraints to secure their insurance.
Having a clear understanding of what your state’s requirements are will help in processing your applications accordingly. If you would like to know more about your state’s auto insurance programs, visit our blog now.
Start saving on your auto insurance now.
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