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What is Dollar-a-day Car insurance Coverage?

Last Updated on December 17, 2023 by a2z_admin


Dollar-a-day insurance coverage is like a special type of government insurance in New Jersey that lets you drive legally for just $365 a year.

This insurance plan is officially called the Special Automobile Insurance Policy, or SAIP, and it’s only available in New Jersey.

But here’s the catch – the coverage is quite limited. It’s mainly to show that you have insurance so you can drive legally. However, it doesn’t meet New Jersey’s minimum auto insurance rules because it doesn’t cover any costs if you hurt someone or damage their stuff.

With SAIP, you get some help for emergency treatment right after an accident. It also covers extra medical care for serious brain and spinal cord injuries, up to $250,000.

If something really bad happens, and the policyholder dies in a crash, there’s a $10,000 payment that goes to their family.

How can I Qualify for dollar-a-day Insurance Coverage?

Dollar-a-day insurance coverage has some limitations, and even if you meet the criteria, it might not provide extensive protection. But if you can’t find affordable auto insurance in New Jersey and have no other options, dollar-a-day insurance allows you to drive legally.

To be eligible for dollar-a-day insurance in New Jersey, you must be an uninsured driver. If you already have car insurance, you won’t qualify.

Additionally, everyone on the policy, including yourself, must be enrolled in a Medicaid program that covers hospitalization. Other Medicaid programs won’t make you eligible.

If you become unenrolled from Medicaid, your dollar-a-day insurance will continue until your next renewal (one year), after which you’ll need to find another policy.

Lastly, your license and registration must be in good standing—meaning not suspended or revoked. If they are, you won’t be eligible.

If you meet these requirements, you should qualify for dollar-a-day insurance coverage. If not, check out our New Jersey car insurance guide for the cheapest rates and best companies.

Before deciding on your insurance company, it’s crucial to learn about local insurance providers and the coverages they offer. Contact your local insurance agent to clarify any questions you may have. Some questions to consider asking include: “What is the best coverage plan for me, my family, or my situation?” “What are the minimum coverage requirements in my state, and what coverage do you recommend?” “Do you offer bundle discounts if I have both auto and home insurance with you?” and “What is the average rate of insurance quotes you offer?”

What Does a Dollar-a-Day Insurance Policy Cover?

If you’re driving in New Jersey and you sign up for the SAIP program, you get a type of car insurance that costs just a dollar a day. But there are some important things you need to know about what it covers. According to the Department of Banking and Insurance in the state, here’s what you get with a dollar-a-day insurance policy:

  • Emergency Treatment After a Car Accident: If you get into a car crash, this insurance helps cover the cost of your immediate medical care.
  • Serious Brain and Spinal Cord Injury Treatment: If you have a really bad injury to your brain or spinal cord, this insurance can help pay for treatment, up to $250,000.
  • Death Benefit: If the worst happens, and you lose your life in an accident, the insurance gives a benefit of $10,000 to your family.

It’s essential to know that this type of insurance is different from regular car insurance. It doesn’t cover things like injuries to other people or damage to their stuff if you cause an accident. If it’s your fault, you might have to pay for their medical bills and the cost of fixing their things.

But there are also some limitations to what the dollar-a-day insurance covers. For example:

  • Limited Injuries Coverage: It only helps with spinal cord and brain injuries. If you have other injuries like whiplash, fractures, or concussions, this insurance won’t pay for your medical expenses.
  • Car Repairs Not Included: If your car gets damaged in a crash, you have to pay for the repairs yourself. Regular car insurance with collision and comprehensive coverage helps with this, but the dollar-a-day insurance doesn’t cover it.

So, while it’s a way to have some coverage for emergencies, it’s important to understand its limits, especially when it comes to injuries and fixing your car after an accident.

Who Qualifies for Dollar-a-Day Car Insurance?

Dollar-a-day auto insurance is a special program meant for drivers with lower incomes who might not otherwise have insurance. This is especially important for people in New Jersey who qualify for Medicaid due to factors like income, age, or disability. The state aims to provide an affordable car insurance option for those who may face financial challenges.

To get Dollar-a-Day insurance, there are specific criteria you need to meet. Not every Medicaid program automatically makes you eligible for this insurance. You must be enrolled in a federal Medicaid plan that includes hospitalization coverage to qualify for the Dollar-a-Day program.

Moreover, you need to have a valid driver’s license, car registration, and no existing car insurance policy. Keep in mind that each Dollar-a-Day policy covers only one vehicle. However, you can include other people in your household as insured drivers, as long as they are also part of an eligible federal Medicaid program.

How Much Does Dollar-a-Day Insurance Cost?

Dollar-a-Day car insurance is called that way because it costs $365 per year, which means it’s like paying a dollar each day. You usually make two payments for this, but if you pay for the whole year upfront, it goes down a bit to $360 per year or $30 per month.

This insurance, known as SAIP, is good for people in New Jersey who don’t have a lot of money. Unlike regular car insurance, the price doesn’t change based on things like how old you are, how you drive, or where you live. This is because the government helps pay for it. Even though it’s already really cheap, you can’t get any extra help or discounts because it’s already a low-cost plan. The only time you might pay more is if you want to use it for more than one car.

What are the other options beyond the Dollar-a-Day?

While a dollar-a-day car insurance might seem like a budget-friendly choice, it has some limitations in coverage. If you’re looking for more protection while driving, there are other options to consider. In New Jersey, you can go for either the Basic or Standard auto insurance plans. Let’s break down what each of these policies offers:

Basic Policy

  • Bodily injury liability: Optional coverage of up to $10,000 per accident.
  • Property damage liability: $5,000 per accident.
  • Personal injury protection: $15,000 per person or accident.

Standard Policy

  • Bodily injury liability: Ranges from $25,000 to $250,000 per person or $50,000 to $500,000 per accident.
  • Property damage liability: Ranges from $25,000 to $100,000 or more per accident.
  • Personal injury protection: Ranges from $15,000 to $250,000 or more per person or accident.

Whether you go for the Basic or Standard auto insurance policy in New Jersey, you’ll also get up to $250,000 in coverage for specific injuries like severe or permanent brain injuries, spinal injuries, and disfigurement. Keep in mind that the Basic plan offers less coverage than the Standard policy and includes the Limitation on Lawsuit option. Both plans also let you add extras like comprehensive coverage, collision coverage, and protection against uninsured and underinsured motorists.

How to Sign Up for Dollar-a-Day Car Insurance?

If you’re looking to get dollar-a-day car insurance, National Continental Insurance Company is the one that offers these policies. But here’s the cool part: you can sign up for it at lots of different places in New Jersey where they sell insurance. And if you’re not sure where to go, just talk to the folks at Personal Automobile Insurance Plan (PAIP) by calling 1-800-652-2471. They’re like the experts on this stuff. Or you can check out the State of New Jersey website to find a PAIP insurance person near you.

Getting dollar-a-day car insurance is super easy. You just have to do a few simple things. Here’s the list of stuff you’ll need to take with you when you go to a PAIP office or talk to your insurance person:

  • Your driver’s license (make sure it’s valid).
  • The registration for your car.
  • Your Medicaid ID card.

And that’s it! Just bring these things, and you’re good to go.

Here Is A List Of Important FAQS
Currently, New Jersey is the sole state offering dollar-a-day insurance. However, some other states have similar insurance options. For instance, California runs the California Low Cost Auto Insurance program. This program is designed to assist low-income drivers by providing liability coverage at levels lower than the state’s minimum requirements, ultimately reducing their insurance costs.
To obtain dollar-a-day insurance in New Jersey, you have two options. You can either buy a SAIP policy through a licensed insurance broker, or you can contact the Personal Automobile Insurance Plan (PAIP) New Jersey office at 1-800-652-2471 to purchase coverage directly from the state.
Yes, dollar-a-day insurance is permitted in New Jersey, but there’s a catch. It’s only available for drivers with active Medicaid that includes hospital coverage. While the coverage is legal, it’s essential to note that it might not provide enough financial protection in the event of an accident. Therefore, drivers are encouraged to choose as much coverage as their budget allows.

Despite being a legal option, dollar-a-day insurance has limitations. It doesn’t cover specific injuries commonly sustained in auto accidents, such as whiplash and fractures. Additionally, it doesn’t pay for the cost of outpatient treatment, like visits to the doctor. Furthermore, the program excludes liability insurance, comprehensive coverage, and collision coverage.

About the Author

Alex Huber is a content writer for Atoz Insurances and he is a very experienced and well-rounded freelance content writer who specializes in the insurance and finance niches. His writing is engaging and informative, and he has a strong understanding of the industries he writes about.

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