Best car insurance for low-income drivers

There is no insurance specifically for low-income drivers. There are a few state-sponsored programs that can help people with low incomes obtain insurance, but for many low-income drivers their best option might be state-minimum liability insurance.

Insure.com developed a ranking to help low-income drivers find the best insurance companies for state-minimum car insurance.

State Farm is the top insurer for drivers looking for the best state-minimum car insurance policy, according to an Insure.com study, followed by Geico and Nationwide.

Insure.com analyzed data on the top auto insurance companies and ranked each from 1 to 5, with 5 being the top score. We examined state minimum rates, a survey of insurance consumers and data from respected third parties A.M. Best, which measures financial strength, and the National Association of Insurance Commissioners (NAIC), which tracks customer complaints.

Overall, Insure.com gave State Farm a score of 4.46 out of a possible 5 for companies offering state-minimum insurance.

State Farms also has one of the lowest annual rates for state-minimum insurance, at $497. Only Geico, which offers state-minimum coverage at $405 a year, is lower.

While State Farm is rated the top company, that doesn’t mean it’s the right company for everyone seeking state minimum coverage. Drivers often have different wants and needs when it comes to insurance, so shop around.

Despite the relatively low cost of state minimum insurance, some people still find it next to impossible to afford car insurance. However, some states have programs that can help. In many cases, you must meet income thresholds and your vehicle might need to meet certain criteria. 

But all drivers should be aware that state minimum and low-income insurance often provides bare-bones coverage. 

Find your state's car insurance requirements

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Know your requirements

Who offers low-income car insurance?

Three states that offer low-income car insurance programs are:

• California
• New Jersey

California’s Low Cost Auto Insurance Program

All drivers in California must maintain proof of financial responsibility, and California’s Low Cost Auto (CLCA) Insurance Program helps income-eligible drivers meet that responsibility by offering discounted rates for their liability insurance. Established in 1999, it exists pursuant to California Insurance Code Section 11629.7. It is a program of the California Department of Insurance and administered via the California Automobile Assigned Risk Plan (CAARP).  

Every policy provides coverage for the driver and eligible secondary drivers and allows people to insure up to two vehicles that they own. 

The program provides basic liability coverage, including:

• Up to $10,000 per person in case of bodily injury or death
• Up to $20,000 per accident in case of bodily injury or death
• Up to $3,000 for property damage

Uninsured Motorist-Bodily Injury and Medical Payments coverage is also available. There is no coverage for medical or vehicle repair costs. 

The starting pricing for an unmarried driver in Alameda County between the ages of 19 and 24 and has been continuously licensed for three years is $521 per year. 

You must meet the following eligibility requirements, regardless of immigration status:

• Have a valid California driver’s license.
• Meet income eligibility requirements.
  • Income eligibility begins at a maximum income of $37,650 for one person.
• Own a vehicle with a value of $25,000 or less.
• Be 18 years old, or at least 16 years old if legally emancipated.
• Be a new driver or have a good driving record.

To sign up, visit MyLowCostAuto.com or call 1-866-602-8861 to check if you qualify and to search for a certified agent near you. 

New Jersey’s Special Automobile Insurance Policy 

The state’s Special Automobile Insurance Policy (SAIP) helps drivers who are eligible for Federal Medicaid with hospitalization. The program is designed to provide some car insurance coverage to those who are likely to go without insurance because of financial limitations.

All SAIP policies are underwritten by National Continental Insurance Co.

Coverage is provided for one car per policy and includes: 

• Emergency treatment following an accident and treatment of serious brain and spinal cord injuries up to $250,000
• $10,000 death benefit

It does not include outpatient treatments (like Medicaid-covered doctors’ visits), liability coverage, or collision and comprehensive coverage. 

Medical coverage-only policies have an annual cost of $360 if paid upfront or $365 if split into two installments. 

To qualify, you must be currently enrolled in Federal Medicaid with hospitalization. However, not all Medicaid programs qualify, so applicants should check their Medicaid ID number with an insurance producer. You do not qualify if your driver’s license or registration is revoked or suspended. 

Policies can be purchased through most insurance agencies, or you can call the Personal Automobile Insurance Plan (PAIP) customer service number at 1-800-652-2471 for support. You can also search for a PAIP producer to help. 

What is the best car insurance for people seeking state-minimum coverage?

For those who aren’t eligible for the programs listed above, the best insurance for drivers with low income may be state-minimum insurance.

Each state has different auto insurance rules, but most require drivers to carry a certain amount of liability insurance, called the state minimum, which covers any bodily injury and property damage you cause to others in an accident. In many states, the minimum is 25/50/25, which means coverage of $25,000 for bodily injury per person, $50,000 for bodily injury per incident and $25,000 for property damage per incident. But note that this type of insurance doesn’t pay for damages to your car or your injuries. A state-minimum liability-only policy is the most basic car insurance policy you can buy.

To select the best car insurance companies for minimum coverage, Insure.com analyzed state-minimum insurance rates, an Insure.com survey of insurance consumers, and data from highly respected third parties that track insurance companies: NAIC’s Complaint Ratio (1.00 is the norm) and A.M. Best ratings (A++ is superior). 

For the rates, we reviewed data from more than 100 insurance companies and analyzed more than 5 million quotes. We looked at the average premiums for state minimum liability insurance in each state. We considered a 40-year-old driver of a 2023 Honda Accord LX with no violations. We assume a 12-mile commute and 10,000 miles driven annually.  

We also tapped the results from a survey Insure.com conducted in the fall of 2023 that asked 1,500 insurance customers to grade their company’s customer experience, claims expertise, policy offerings and other products and services. 

State Farm came out on top in our ranking (see below).

State Farm has a relatively low NAIC complaint score of 0.52 and an A.M. Best rating of A++, indicating a high level of financial stability. 

On top of that, State Farm has among the lowest liability car insurance rates at an average of $497 annually, with only Geico offering a lower rate.

It should be noted that USAA had a higher score than many of the insurers and is listed on the table below. However, it’s excluded from the overall ranking because it only provides services to military community members.

*USAA scored well, but is excluded from the overall rankings since it’s only available to military families.

The top 5 car insurance providers for state-minimum insurance

The top five auto insurance companies for state-minimum insurance are State Farm, Geico, Nationwide, Progressive and Travelers. 

Below is a scorecard on each of the top five.

You can find additional details about these auto insurance companies in Insure.com’s listing of the best car insurance companies of 2024. 

State Farm

• Overall rating: 4.46
• A.M. Best rating: A++
• NAIC Complaint Ratio: 0.52
• Average annual premium for state minimum insurance: $497

Geico

• Overall rating: 4.39
• A.M. Best rating: A++
• NAIC Complaint Ratio: 0.77
• Average annual premium for state minimum insurance: $405

Nationwide

• Overall rating: 4.05
• A.M. Best rating: A+
• NAIC Complaint Ratio: 0.66
• Average annual premium for state minimum insurance: $532

Progressive 

• Overall rating: 4.02
• A.M. Best rating: A+
• NAIC Complaint Ratio: 0.73
• Average annual premium for state minimum insurance: $549

Travelers

• Overall rating: 3.90
• A.M. Best rating: A++
• NAIC Complaint Ratio: 1.03
• Average annual premium for state minimum insurance: $506

Cheap annual and monthly state minimum car insurance rates

Below is a look at the average state-minimum car insurance premiums charged by the companies we ranked on both an annual and monthly basis. 

*USAA has the cheapest rates, but it’s only available to military families.

Average cost of state minimum auto insurance by state

Among the factors that determine how much you pay for car insurance are your age, driving history, the car you drive, the coverage you choose and your location. 

The table below shows the average in each state for state minimum car insurance.  

10 most expensive states for minimum insurance coverage

Florida has the most expensive state minimum insurance average. Florida requires drivers to have at least $10,000 in property damage liability coverage and $10,000 personal injury protection.

10 least expensive states for minimum insurance coverage

Iowa has the least expensive state-minimum insurance average. Iowa requires $20,000 bodily injury per person, $40,000 bodily injury per accident and $15,000 property damage per accident.