Dollar-a-Day Car Insurance: 5 Surprising Facts to Know

You can get dollar-a-day car insurance for $1/day or $365/year in New Jersey, but this dollar a day auto insurance plan is only for those on Medicaid and doesn't meet the state's legal minimum. The only coverage drivers receive with dollar-a-day car insurance through Medicaid is bodily injury liability insurance specifically for treating severe brain and spinal cord injuries and a death benefit. Drivers will still need to purchase additional liability coverage to meet the New Jersey minimum.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Mar 12, 2021

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Here's what you need to know...

  • Dollar-a-day car insurance is only available to a specific demographic in New Jersey.
  • Dollar-a-day car insurance in NJ does not meet New Jersey’s state minimum car insurance requirements and cannot be combined with regular car insurance.
  • There are several other options for legal car insurance that can be affordable and may better fit your needs.

If you’re working on understanding car insurance policy options and ways to save, your search for cheap car insurance may have led you to an ad or a plan for one-dollar-a-day car insurance in New Jersey.

Anyone on a budget will find the idea of dollar-a-day auto insurance appealing. Still, you might be disappointed to learn that this is a medical option available under certain circumstances and only in one place. Read on to learn more about how to get dollar-a-day insurance.

If you can’t buy dollar-a-day car insurance but want to save money, enter your ZIP code in our free tool to get affordable car insurance quotes available in your area right now.

#1 – Does dollar-a-day car insurance really costs one dollar?

Does a dollar-a-day insurance policy really only cost one dollar per day? What does it cover? Does it meet the minimum state requirements for coverage? Read through the next few sections to find out more.

What is dollar-a-day car insurance?

One dollar a day car insurance is another term for an insurance program called Special Automobile Insurance Policy (SAIP) that is available in New Jersey. SAIP insurance in NJ allows people with low incomes who qualify for Medicaid to save money on medical liability car insurance.

There is no dollar-a-day car insurance company. The only way to get it is through the state of NJ.

How much does dollar-a-day car insurance cost?

As you can tell by the title of this section, the cost of dollar-a-day insurance through Medicaid is literally a dollar a day, or $365 a year. There are no differences in dollar-a-day car insurance rates from person to person.

Do you need to pay one lump sum, or can payments be made? The SAIP program allows qualified recipients to pay the rate in either a single lump sum (in which case, you’ll save an additional $5) or in two separate payments.

What does dollar-a-day car insurance cover?

What does dollar-a-day insurance cover?

The state’s Department of Banking Insurance developed Medicaid auto insurance in NJ so that drivers who don’t carry insurance on their vehicles because they can’t afford it can get medical liability to cover specific medical costs incurred if they cause an accident.

This program doesn’t provide any other liability auto insurance coverage.

There are only about 200,000 people that qualify for one-dollar-a-day car insurance in NJ, however.

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#2 – Does dollar-a-day car insurance have property damage coverage?

As we noted in the previous section, dollar-a-day insurance on its own isn’t enough for you to meet the minimum coverage requirements in New Jersey. So what is the minimum liability coverage required in the state? Take a look at this table to find out.

Minimum Liability Car Insurance Requirements in New Jersey
Liability Coverage TypeMinimum Amount of Coverage Required
Bodily Injury$15,000 per person $30,000 per accident
Property Damage$5,000
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Property damage is not included in the dollar-a-day insurance.

So how do you make sure you have the legally required coverage level? Keep reading for more.

What does dollar-a-day car insurance cover?

The dollar a day policy covers:

  • Emergency treatment for the policyholder immediately after an auto accident.
  • Additional medical treatment for critical brain and spinal cord injuries to the policyholder for up to $250,000.
  • A $10,000 death benefit paid to your beneficiaries, which is the average cost of a funeral.

What doesn’t dollar-a-day car insurance cover?

Dollar-a-day insurance only covers medical costs in the event of an accident. Specifically, it only covers costs (up to $250,000) for severe brain and spinal injuries and a death benefit.

You cannot use your own insurance company for your property damage liability and use the one-dollar-a-day car insurance in NJ for the bodily injury (medical) liability portion of your car insurance.

When you choose an insurance company, they won’t break up these two options like the one-dollar-a-day insurance policy in NJ does.

The dollar a day plan leaves you responsible for:

  • Ongoing and non-emergency treatments not related to the policyholder’s brain or spinal cord.
  • Injuries to other parties involved in an auto accident where the policyholder is at fault.
  • Legal costs in the event that another driver or injured person sues the policyholder.
  • Damage to other’s property where the policyholder is at fault.
  • Damage to the policyholder’s vehicle or other personal property under any circumstances.

This means if you qualify for the New Jersey dollar-a-day car insurance program, but you want property damage liability coverage, this isn’t the program for you.

Can multiple drivers get the Special Automobile Insurance Policy?

The NJ SAIP only covers individuals enrolled in Medicaid. One car and multiple people in the household enrolled in Medicaid can all be covered by the same policy.

Can multiple cars get the dollar-a-day car insurance?

One car can be covered by a single policy. For households that require more, additional dollar-a-day car insurance policies are needed for each vehicle. There’s only one car per policy.

#3 – Does everyone qualify for dollar-a-day insurance?

Who qualifies for NJ SAIP insurance? If more than one person lives in your home, will they qualify for SAIP insurance? What happens if you don’t qualify? Keep reading to find out more.

Who is eligible for SAIP dollar-a-day car insurance?

You must qualify for Medicaid to be eligible for the SAIP dollar-a-day insurance in NJ. However, if you qualify for Medicaid, but you aren’t on Medicaid, then you won’t be able to purchase dollar-a-day car insurance.

How do you get a SAIP policy?

You will have to sign up for the Medicaid program to purchase Medicaid car insurance in NJ. When you apply for SAIP, you’ll need to bring:

  • Drivers licenses for anyone who will be driving the insured vehicle
  • The vehicle registration
  • A Medicaid ID card that lists everyone who will be covered under the dollar-a-day policy as a Medicaid recipient

If more than one individual lives in your home, they’ll only be covered by your SAIP coverage if they’re also enrolled in Medicaid.

Can I get dollar-a-day car insurance in NJ if I have a bad driving record?

Your driving record does not affect your coverage unless your driver’s license or registration has been revoked or suspended. This allows dollar-a-day car insurance policies to streamline approval processes.

What happens when Medicaid benefits are stopped?

You’re required to provide proof of enrollment in Medicaid to be able to apply for and obtain SAIP coverage.

If your Medicaid benefits are stopped or canceled after a SAIP policy already covers you, you won’t lose your NJ dollar-a-day insurance until it’s time to renew.

Which is when you’d need to provide proof of Medicaid enrollment again.

What should you do if you don’t qualify for dollar-a-day car insurance?

The good news is that you can save money on your car insurance by shopping around, even though it won’t be an affordable dollar-a-day car insurance plan.

The bad news is that if you live in certain states, have a bad driving record, or don’t meet certain criteria, you’re going to pay higher rates for a policy, sometimes much higher than what you might find affordable.

There are some options for you to consider if you don’t meet all of the necessary criteria for the NJ dollar-a-day car insurance policy. Here are some of them:

How to Save on Car Insurance Coverages in New Jersey
Coverage TypesAverage Annual Rates What It ProvidesHow to SaveConsiderations
Liability Coverage$865.55Coverage for damages you cause to another partyGet the state-required minimum coverage levels to pay the cheapest rate and still be in compliance with the lawFor better protection, higher limits than what is required by the state are recommended; compare quotes to see what you could afford
Collision Coverage$365.23Financial compensation for your own vehicle's damage when you cause an accidentIncrease your deductibleIf your car is damaged, you will have to come up with the deductible; make sure you are prepared for the amount you decide on
Comprehensive Coverage$123.18Compensation for your own vehicle's damage from non-accident-related incidentsIncrease your deductibleIf your car is damaged, you will have to come up with the deductible; make sure you are prepared for the amount you decide on
Pay-As-You-Go InsuranceN/ACoverage at the level you choose for the number of miles you actually driveDrive fewer milesIf you drive many miles annually, this option will probably not save you money and will actually cost more than standard coverage
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However, you need to understand that if you choose liability insurance only to save money, you won’t have coverage for your own vehicle if you’re in an accident.

There is also another auto insurance option to consider if you live in NJ. New Jersey also offers a basic state plan that can cost as low as $400, depending on your driving history and profile. This plan is offered to everyone and offers more coverage.

If you can’t afford a lot of insurance, then in all likelihood, you probably won’t be able to replace your vehicle if you total it in an accident. In this case, you might want to consider car insurance for Medicaid recipients in NJ to make insurance more affordable.

#4 – Is dollar-a-day car insurance the cheapest option?

Unfortunately, you will not find insurance as low as the Medicaid welfare car insurance in NJ anywhere else. However, there are states with insurance costs much lower than the national average.

For example, according to the Insurance Information Institute (III), Idaho averages $553 a year for liability insurance. This average works out to $1.51 a day.

Currently, there are no other states that offer the dollar-a-day car insurance program; however, since the dollar-a-day program in NJ is so new, it may simply be a matter of time before other states start using this as an option.

It will likely depend on how successful the NJ FamilyCare car insurance is.

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#5 – Are there dollar-a-day car insurance quotes?

Medicaid dollar-a-day car insurance isn’t like other insurance plans, which means you won’t be able to receive quotes for your one dollar-a-day car insurance in NJ. The cost doesn’t change based on your driving record or any other criteria. If you qualify, it will cost $365 a year.

How do you obtain dollar-a-day car insurance?

There is only one way to get dollar-a-day car insurance: through the Department of Banking Insurance. There are no other options.

Can you still qualify for dollar-a-day insurance if you have a bad driving record?

Unfortunately, like with traditional insurance, if you have a bad driving record, the Department of Banking Insurance can turn you down for its insurance program.

Even if you meet the income requirements, you may not meet the driving requirements, similar to those of most other car insurance companies.

For other insurance options, you should use our free quote tool to compare rates between companies. For people with limited income, this is the best way to get the lowest rates without sacrificing quality coverage.

The process is fast and easy, and in just a few moments, you can start reviewing car insurance quotes. You will have several companies to choose from, and you aren’t required to purchase anything.

Even if you link to an insurance company’s website, you don’t have to make a purchase. Check out your options and what the company directly offers you before making your final decision.

Dollar-A-Day Car Insurance: The Bottom Line

One dollar a day car insurance in NJ is only available to qualified Medicaid recipients. It really does only cost $1 per day or $365 per year making it the cheapest car insurance in NJ. You can’t buy dollar-a-day car insurance in Florida or PA

It only provides medical coverage for severe brain and spinal injuries that result from a car accident. As a result, this coverage doesn’t meet the minimum coverage required by the state of New Jersey.

If affordable dollar-a-day car insurance isn’t available where you live (or you don’t qualify), enter your ZIP code in our free tool to start comparing cheap car insurance quotes today.

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