For drivers that cannot afford high premiums, there are low-cost automobile insurance plans available from the government.
Automobile insurance is mandatory in all 50 states. Premium rates differ depending on the population of a certain area and on the income of the insured driver. Insurance plans are widely available through private insurance companies, though for those with lower income, there are less expensive public auto insurance options. Those insurance plans may come from either state governments or the federal government.
California Low-Cost Automobile Insurance Program
The state of California offers the California Low-Cost Automobile Insurance Program. The program was initiated in 2000 in Los Angeles and San Francisco. In 2005, the state legislature approved the extension of this program to Alameda, Riverside, San Bernardino, Orange, Fresno and San Diego; this extension took effect in April of 2006. At the same time, the state's Insurance Commissioner was granted the ability to extend the program to any other county in need. According to the terms of CLCA, the state of California would insure a driver for up to $10,000 of bodily injury per person and up to $20,000 per accident. The state grants up to $3,000 of property damage coverage per accident as well.
In order to qualify for CLCA, a driver must be at least 19 years old and have held a driver's license for three years. The driver's car must be worth $20,000 or less. The person must be a good driver with no convictions and one point or less listed on her driving record. The applicant must also meet the income requirements.
Maryland Auto Insurance Fund
The state of Maryland also has a public automobile insurance program, Maryland Auto Insurance Fund. MAIF was established in 1972 with the goal of providing automobile insurance to residents of the state of Maryland who could not afford to purchase private automobile insurance policies. The State of Maryland can offer interested drivers an estimate of their premium online. The amount of the premium will depend on how a driver answers the state's questions.
MAIF pays a minimum of $20,000 per person or $40,000 per accident in case of injury and $15,000 per accident for property damage. The same ratio applies in case another driver involved in the accident is uninsured.
New Jersey Special Automobile Insurance Policy
New Jersey also offers a state-run automobile insurance policy, albeit a much more limited one. It is the New Jersey Special Automobile Insurance Policy. In order to qualify for SAIP in New Jersey, a driver must qualify for Federal Medicaid with hospitalization. New Jersey's policy provides coverage only for medical care and comes with a $365-per-year price tag. New Jersey drivers can purchase SAIP at almost every automobile insurance provider in the state. The policy covers up to $250,000 in emergency medical costs resulting from an accident, as well as $10,000 death benefit.
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