Best Income-Based Auto Insurance (2021)

Affordable auto insurance that is income-based is available, but rates differ depending on your location. While anyone can obtain cheap car insurance by accumulating discounts and driving safely, four states offer government-funded programs for those that can’t afford coverage. Learning more about auto insurance that is income-based will help you find affordable coverage.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Aug 26, 2021

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What You Should Know

  • Minimum coverage is the cheapest option
  • Four states offer government-funded auto insurance
  • Several factors impact your auto insurance rates

Drivers on a budget might be wondering how to compare auto insurance quotes based on income.

Four states offer government-funded programs, but anyone can find cheap auto insurance. Learning how to find auto insurance that is income-based will help you obtain affordable coverage.

Before learning how to find auto insurance that is income-based, enter your ZIP code to get free car insurance quotes in your area.

What are the cheapest companies for auto insurance that is income-based?

According to the Insurance Information Institute, there are various things to consider when choosing the most affordable auto insurance that is income-based.

In most cases, the least expensive option is a state’s minimum required coverage. While this won’t protect you from all situations, it will provide some coverage should you get into an accident.

Most states require a minimum of $50,000 in bodily injury liability costs per accident. If you choose to add any more coverage to your policy, it will increase your auto insurance rates that are income-based.

The amount you’ll pay for income-based auto insurance depends on your location and the company. The national average is as low as $373 per year with USAA, and as high as $893 per year with MetLife.

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What factors affect auto insurance that is income-based?

Various factors determine auto insurance quotes that are income-based. Understanding auto insurance will help you obtain the cheapest coverage.

You might be asking, “How does your income affect your insurance rates?” Your income itself won’t impact your rates, but certain factors correlate with income. These factors include where you live and your highest education level.

Another major factor is the type of car you drive. High-performance vehicles drive at higher speeds, so they always cost more to insure. Auto insurance companies have also concluded that drivers of these cars are more likely to take risks.

Your credit score is also factored into your auto insurance rates. The better your credit score, the more likely it is that you’ll receive lower rates. There are three basic levels of credit:

  • Good credit: 769-794
  • Fair credit: 710-740
  • Poor credit: 524-577

The following chart shows how your credit score can affect your auto insurance rates by displaying the average annual rates for minimum coverage based on credit score.

Average Annual Auto Insurance that is Income-Based by Company and Credit Score
CompanyPoor CreditFair CreditGood Credit
Allstate$2,254$1,604$1,351
Farmers$3,281$1,776$1,578
GEICO$1,681$1,212$1,047
MetLife$4,248$2,332$1,686
Nationwide$1,781$1,518$1,341
Progressive$2,475$1,792$1,381
State Farm$2,527$1,482$1,235
Travelers$2,490$1,721$1,525
USAA$1,460$936$883
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In addition to the previously mentioned factors, auto insurance companies also consider the following when setting rates:

  • Age
  • Gender
  • Marital status
  • Driving history
  • Previous insurance coverage
  • Claims history
  • Average mileage

It’s important to remember that your auto insurance rates will increase if you let your insurance lapse, are caught driving without coverage, or cancel your policy, even if it’s temporary. Many auto insurance companies won’t even provide coverage to applicants with a history of these actions.

What discounts are available for auto insurance that is income-based?

An auto insurance company that is income-based will usually offer various discounts that can lower your rates. These savings opportunities include lifestyle choices, driving habits, and buying multiple insurance policies with the same company.

Some of the most popular discount opportunities include:

  • Pay-in-full
  • Job-related
  • Safe driver
  • Good student
  • Bundling insurance
  • Safety equipment
  • Defensive driving course

While you can bundle discounts to decrease your auto insurance costs, the best way to obtain and maintain low rates is with a clean driving record. Since a safe driver is less likely to file a claim, auto insurance companies will provide lower rates for those drivers.

What state-funded programs provide auto insurance that is income-based?

Some major auto insurance companies offer low rates, but four states have taken it a step further.

Drivers looking to buy auto insurance that is income-based in California, New Jersey, Maryland, and Hawaii can apply for government-sponsored programs that provide car insurance for low-income individuals.

The California Low-Cost Automobile (CLCA) program was created in 1999 and provides liability and underinsured motorist protection. Applicants must be 250% below the federal poverty limit, own a car that costs less than $25,000, and maintain a safe driving record to be eligible.

The Special Automobile Insurance Policy (SAIP) is a New Jersey state-funded program that only covers emergency medical costs if you get into an accident. This plan doesn’t cover any personal liability or damage to your vehicle.

Hawaii’s Assistance to the Aged, Blind, and Disabled (AABD) services offers free auto insurance to residents with disabilities or those 65 and older with income 34% below the federal poverty line. This program helps those that are considered the most in need.

Maryland’s Automobile Insurance Fund (Maryland Auto) was created in 1972 by the Maryland legislature. Available to any Maryland resident with a valid license, the primary focus is on those with a canceled policy or who have been denied coverage from multiple private companies.

As you can see, Maryland’s program is the most widely available. However, Hawaii’s program offers the cheapest car insurance for eligible residents.

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Auto Insurance That is Income-Based: The Bottom Line

Cheap car insurance is available if you know what impacts your rates and how to lower your risk. Additionally, four states offer state-funded programs to provide auto insurance to those in need. Understanding auto insurance that is income-based will help you obtain affordable coverage.

Now that you know how to obtain auto insurance that is income-based, enter your ZIP code to get free car insurance quotes in your area.

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Compare over 200 auto insurance companies at once!

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