Since the automotive industry is the backbone of mass transportation and mobility, car insurance policies have also grown in popularity. As of 2022, approximately 215 million American drivers have car insurance, and the industry's overall worth is $316 billion. However, with surging inflation rates each year, car insurance premium costs have also risen exponentially.
In the last 12 years, national rates have risen by 29.6%. This year, the average rate for auto insurance premiums is $1,548. However, average annual rates in some cities stand at $6,200, exceeding the national average by four times.
If you are unable to meet such rates, there are government programs that provide financial assistance for auto insurance policies. Read on how to get help paying for your car insurance.
Basic Car Insurance Policy Coverage
Despite the multiple types of car insurance policies mandated by each state, primary coverage is offered to all basic insurance holders. This includes the following:
Physical Injury Liability
If you, the designated insurance carrier or driver, injure someone else, that injury is covered by your bodily injury liability insurance. When you use someone else's vehicle with their consent, you are still covered by your insurance, as are any family members specified in your policy.
It is crucial to carry comprehensive liability insurance in a serious car accident since you could face a severe lawsuit.
Personal Injury Protection (PIP)
In its broadest sense, Personal Injury Protection (PIP) can provide compensation for medical expenses, auto repairs, missed wages, and other physical and non-physical damages usually caused by the driver liable in a car accident or collision. It may also cover funeral costs in the event of your or another driver's death.
Property Damage Liability
With this coverage, your insurer will pay for any damages you or another driver using your automobile with your consent might cause to another person's private property. Typically, this includes damages caused to another driver's vehicle and any lampposts, fences, telephone poles, and other structures your vehicle struck.
Collision
Damage to your vehicle from collisions with other cars, animals, and objects like trees or telephone poles or from flipping over is insured under collision coverage. Additionally, any car issues or damages caused by potholes are covered.
Factors That Affect Costs Of An Auto Insurance
The rates that insurance companies charge each driver depending on how likely that driver is to file a claim and how costly that claim might be for the insurance provider. Additionally, when deciding your premium amount, auto insurance companies take into account several factors, such as:
Insurance Provider
Insurance providers vary greatly, so if you purchase a coverage plan from an expensive provider, you may be paying more than is necessary.
Age And Gender
Compared to older drivers, young drivers pay significantly higher auto insurance rates; young drivers' rates are 4.5x higher than those of adult drivers. This is because younger drivers are more likely to get into an accident than experienced drivers.
Area Of Residence
The rates of car insurance vary greatly across the country. You might pay extra if you reside in a state or city with a high prevalence of car theft or with more hazardous roads.
State-Funded Car Insurance Policies For Low-Income Individuals And Families
Few states offer government-funded auto insurance policies to help prevent car owners from driving without coverage. These insurance plans are made available for low-income individuals and families at a discounted rate and with significant coverage.
California
The California Low-Cost Automobile (CLCA) insurance program provides qualified drivers with motorist protection and basic liability coverage. An applicant must be under the federal poverty line, have a clean driving record, and have a vehicle worth less than $25,000 to qualify for this program.
Hawaii
If you are a recipient of Hawaii's Assistance to the Aged, Blind, and Disabled (AABD) benefits, then you may also qualify for a free auto insurance policy. This government-sponsored program provides disabled individuals and seniors aged 65 and older.
Moreover, those whose gross income is 34% below the poverty line with insurance policies with limited PIP and liability coverage.
New Jersey
The Special Automobile Insurance Policy of New Jersey provides coverage of up to $250,000 for serious brain and spinal cord injuries and emergency medical coverage for bodily injuries sustained from a car accident.
Additionally, it offers death benefits of up to $10,000 to the dependents of anyone killed in serious car accidents. It does not provide liability insurance for property damages you caused or cover any of your vehicle's repair expenses.
Need help in other problems like paying off your traffic tickets? Check out this article about programs that help in paying off traffic ticket collections.
Want to lighten your financial load even further? Discover how college students can snag a free car! Dive into our latest blog post for all the details.
While managing car insurance costs is essential, securing a vehicle in the first place can be a challenge for many. If you're in California and need assistance, our recent article on programs to help get a car in California can guide your journey. Learn about these programs and drive towards a brighter future.
If you cannot pay off your energy bills, check out this article from Gov Relations on the low-income home energy assistance program.
