Government Car Insurance Coverage
Government car insurance can cost up to $365 per year. State-sponsored auto insurance (or government auto insurance) is only available in California, Hawaii, and New Jersey. In states that don't have government car insurance policies, you can use car insurance discounts to lower annual premiums. The most effective auto insurance discounts are defensive and safe driver discounts. Compare companies and shop around to find the best rates.
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Written by
D. Gilson, PhD
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Reviewed by
Jeffrey Johnson
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UPDATED: Mar 31, 2021
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- Only three states in the U.S. have state-sponsored programs.
- Government employees can receive special car insurance discounts.
- SSI recipients don’t receive special discounts, but they could receive cheap auto insurance rates from policy discounts.
Government car insurance is an option for drivers to get state-sponsored car insurance coverage when standard car insurance is too expensive.
Only three states in the U.S. offer low-income car insurance, so you won’t be able to buy government car insurance across the nation.
If you live in a state that doesn’t have state-sponsored auto insurance (government auto insurance), we’ll show you the road to affordable auto insurance and what to look for in a good policy.
Compare car insurance quotes right now by entering your ZIP code above, or continue reading to learn how government car insurance eligibility.
Table of Contents
What is Government Car Insurance?
Government auto insurance (sometimes listed as govt car insurance) is another way of saying state-sponsored auto insurance.
It’s a government program that provides car insurance coverage for people who cannot afford standard car insurance.
The government car insurance rates are inexpensive and likely based on the policyholder’s income level. In New Jersey, state-sponsored car insurance costs $365 per year.
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Where Can I Get Government Car Insurance?
State-sponsored car insurance isn’t available nationwide. You can only find government auto insurance in California, Hawaii, and New Jersey.
- California’s Low-Cost Car Insurance Program
- Hawaii Department of Commerce and Consumer Affairs
- New Jersey Department of Banking and Insurance
The coverage options available are car insurance requirements.
Let’s look at the minimum requirements for auto insurance in each state with government auto insurance.
| State | Minimum Bodily Injury Liability for One Person Per Accident | Minimum Bodily Injury Liability for Multiple People Per Accident | Minimum Property Damage Liability Per Accident |
|---|---|---|---|
| California | $15,000 | $30,000 | $5,000 ($3,000 for low-income drivers |
| Hawaii | $20,000 | $40,000 | $10,000 |
| New Jersey | $15,000 | $30,000 | $5,000 |
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Therefore, a driver with state-sponsored car insurance won’t have an opportunity to get collision or comprehensive coverage unless given to them by the state.
It’s possible that a driver can qualify for more coverage, but it’s likely to be personal injury protection (PIP) or medical payments (MedPay). Additionally, the coverage through government programs may provide coverage only for the passengers, but not the driver.
What’s the Difference Between Government Car Insurance v.s Standard Car Insurance?
Government car insurance is an inexpensive solution for individuals who earn less than average. People who need to buy state-sponsored car insurance may not have the same coverage options as those with standard car insurance.
So what do you do when you live in a state that doesn’t have low-income car insurance? Continue through the subsections below to learn how to compare auto insurance and how to reduce the cost of auto insurance.
How to Use Car Insurance Discounts to Get Cheaper Rates
The best auto insurance companies provide discounts for customers.
Even with low-income status, you can receive several discounts that lower auto insurance premiums per month.
A defensive driver discount can decrease your rates by five to ten percent. Each company carries different discount options, but the most effective discount is the safe driver discount.
Let’s examine the impact a safe driver discount has on the car insurance rates from the top companies in the United States.
| Top Car Insurance Companies | Safe Driver Car Insurance Discount | Average Annual Car Insurance Rates | Average Annual Car Insurance Rates After Safe Driver Discount is Applied | Average Monthly Car Insurance Rates After Safe Driver Discount is Applied |
|---|---|---|---|---|
| USAA | 12% | $2,542 | $2,237 | $186 |
| Nationwide | 35% | $3,447 | $2,241 | $187 |
| Allstate | 45% | $4,898 | $2,694 | $225 |
| GEICO | 15% | $3,216 | $2,734 | $228 |
| State Farm | 15% | $3,268 | $2,778 | $232 |
| Progressive | 31% | $4,044 | $2,790 | $233 |
| Travelers | 23% | $4,445 | $3,423 | $285 |
| American Family | N/A | $3,443 | $3,443 | $287 |
| Farmers | N/A | $4,189 | $4,189 | $349 |
| Liberty Mutual | N/A | $6,096 | $6,096 | $508 |
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Look at how much the car insurance rates decreased with one discount. Imagine if you add other discounts. You could lower your auto insurance rates to a more cost-efficient rate.
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Government Car Insurance: What’s the bottom line?
Government auto insurance is designed specifically for low-income earning individuals. SSI recipients and individuals on a fixed income should pursue low-income auto insurance if the state sponsors it.
If you can’t get affordable car insurance from the best companies, you can always go through smaller companies. To lower your premiums even further, get a liability-only car insurance policy.
Start shopping for cheap car insurance with our FREE comparison tool below. Enter your ZIP code to start comparing multiple companies today.
Frequently Asked Questions: Government Car Insurance
Let’s answer a few frequently asked questions about government car insurance.
#1 – How do you apply for government car insurance?
You won’t get government auto insurance in most states. You can only apply for low-income car insurance in California, Hawaii, and New Jersey. Go to each state’s department of insurance website to learn how to apply.
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#2 – Is GEICO a government car insurance company?
GEICO stands for Government Employees Insurance Company. However, the company doesn’t exclusively sell to government employees. GEICO sells insurance to everyone.
#3 – How much is government car insurance?
Affordable government car insurance can be as low as $1 per day or $365 per year.