Automobile

Dollar-A-Day Car Insurance: Everything You Need to Know

If you’re a driver who lives in New Jersey and you’re struggling to make ends meet, you don’t have to go without car insurance. Instead, consider enrolling in New Jersey’s dollar-a-day car insurance program.

What Is Dollar-A-Day Insurance?

Drivers who live in New Jersey and are enrolled in federal Medicaid with hospital coverage may qualify for the state’s Special Automobile Insurance Policy (SAIP). This special policy, also known as dollar-a-day insurance, provides very limited car insurance coverage. While it doesn’t meet New Jersey’s minimum requirements for the typical driver, it’s an option for drivers who can’t afford traditional insurance.

According to QuoteWizard, SAIP insurance allows low-income drivers who qualify for Medicaid to save money on medical liability car insurance. Dollar-a-day insurance is not available through insurance companies. If you want to participate in the SAIP program, you have to apply through the state of New Jersey.

Drivers who participate in the SAIP program receive proof of insurance and are legally permitted to drive on New Jersey roadways. However, dollar-a-day insurance provides less coverage than what is usually required for New Jersey drivers.

As ValuePenguin points out, SAIP only pays for emergency medical treatment and the most severe driver injuries. It does not cover damage to the other driver’s vehicle or the other driver’s medical care. If you only have dollar-a-day coverage and you’re at fault for an accident, you’re responsible for paying for the other driver’s car repairs and medical care. While SAIP’s limited coverage leaves you on the hook if you’re responsible for an accident, it may be your best way to drive legally in New Jersey.

What Does Dollar-A-Day Insurance Cover?

A dollar-a-day insurance policy is extremely limited in the coverage it provides. According to Insurify, a dollar-a-day insurance company covers:

  • Emergency treatment for the policyholder immediately following an accident
  • Medical treatment if the policyholder sustains severe brain or spinal injuries, with coverage limited to $250,000
  • A $10,000 death benefit to the policyholder’s family if the policyholder dies in an accident

    Insurify also notes that dollar-a-day policyholders are responsible for:

    • Ongoing and nonemergency treatments for injuries not related to your brain or spine
    • All injuries to the other parties involved in the accident, if you’re at fault for the accident
    • All damages to the other driver’s vehicle, if you’re at fault for the accident
    • All damages to your vehicle or other property

      ValuePenguin notes that the only drivers eligible for dollar-a-day insurance are those who qualify for Medicaid, meaning they have little to no income or they have disabilities. That low-income status means that a dollar-a-day policyholder would have trouble paying for medical treatments or property damage. If possible, you should enroll in another program, such as New Jersey’s Basic or Standard policies.

      How Much Does SAIP Insurance Cost?

      According to QuoteWizard, New Jersey’s SAIP insurance costs policyholders:

      • $365 a year if you pay in two installments, which averages out to a dollar a day
      • $360 a year if you pay for the entire year upfront

        The SAIP program is incredibly cheap compared to traditional insurance. Unlike other insurance policies, the rates don’t vary due to driver history because SAIP is provided by the state instead of an insurance company. However, because it’s provided by the state and costs so little, there’s no other way to subsidize the cost of SAIP.

        The only reason you would have to pay more for SAIP is if you have multiple cars that need insurance. Because the state limits a SAIP policy to one car, to insure another vehicle, you would have to pay for another policy.

        How Do You Apply for Dollar-A-Day Insurance?

        To apply for New Jersey’s SAIP program, Insurify reports that you have to locate a Personal Automobile Insurance Plan office near you, or you can call 1-800-652-2471. When you apply for SAIP, you must provide the following documents:

        • Driver’s licenses for every driver you need to insure
        • Your car’s registration
        • Medicaid cards for every driver you need to insure

          While SAIP coverage is provided by the state, you can purchase your policy at several insurance agencies across New Jersey. You can go online and see which agencies in your county can facilitate SAIP coverage.

          How Do You Qualify for Dollar-A-Day Insurance?

          New Jersey’s SAIP program has strict eligibility requirements. According to ValuePenguin, these requirements include:

          • You must be an uninsured driver. Drivers who already have insurance can’t receive coverage under SAIP.
          • You and every driver you want to list on the SAIP policy must be enrolled in a Medicaid program with hospitalization coverage. If you qualify for Medicaid but aren’t enrolled, you can’t qualify for SAIP.
          • If you discontinue your enrollment in Medicaid, your dollar-a-day coverage will continue until your policy’s expiration date. Once your policy expires, you’ll have to find other coverage.
          • You must have a valid driver’s license and vehicle registration. If your license or registration lapses or gets suspended, you’ll no longer qualify for dollar-a-day coverage.

            Alternatives to Dollar-A-Day Coverage

            Because dollar-a-day insurance provides such limited coverage, ValuePenguin recommends that you shop around and compare insurance quotes before signing up for SAIP. The state of New Jersey offers a Basic plan as an alternative to conventional insurance policies. Depending on your driver profile and history, you might pay as little as $400 for a Basic policy.

            While the dollar-a-day policy is only available to drivers enrolled in Medicaid, New Jersey’s Basic plan is available to all drivers. The Basic plan also provides much more coverage. It’s also a good idea to gather quotes from traditional insurance companies. You might qualify for several discounts that could make a conventional policy much more affordable.

            Things to Consider Before Signing Up for SAIP

            Insurify recommends that you consider a few things before signing up for SAIP. Consider how you’ll manage to pay for the costs you’ll incur if you’re responsible for an accident. Typically, low-income drivers don’t have the funds to cover such emergencies. What if your car is totaled in an accident? While conventional insurance would pay to replace your car, you won’t receive a dime if you only have dollar-a-day insurance.

            SAIP is a last-resort option. If you can afford coverage that meets New Jersey’s minimum liability requirements, you’ll have much better protection in an accident.

            When shopping for insurance, it may be tempting to go with the cheapest rates. However, cheaper rates often mean inadequate coverage. By doing a little research, you can find reasonably priced insurance that will provide you with adequate protection.

            Check this out if you need additional information, resources, or guidance on car insurance.

            Sources:

            Dollar a Day Insurance from the New Jersey SAIP

            SAIP Dollar a Day Insurance in New Jersey

            NJ Dollar a Day Program: How it Works & How to Enroll (2021)

            Car Insurance

            Looking for a Discount on Auto Insurance? Find Out All You Need to Know

            How Much is Car Insurance in New Jersey?

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