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What is dollar-a-day insurance coverage?

Last Updated on February 7, 2024 by Andy Walker

Alright, so there’s this thing called dollar-a-day insurance, and it’s like a special type of insurance you can get in New Jersey. It lets you drive legally for just $365 a year.

But here’s the deal—it’s pretty basic. This insurance, officially called the Special Automobile Insurance Policy or SAIP, doesn’t cover a whole lot. It’s mainly there to show you have insurance so you can drive legally. But, and it’s a big but, it doesn’t meet the minimum requirements for regular car insurance in New Jersey. So, if you get in an accident, it won’t help pay for damage or injuries to other people.

What it does cover is emergency treatment right after an accident for you. If you have a really serious injury, like to your brain or spinal cord, it might help with medical costs up to $250,000. And if the worst happens and you die in a crash, there’s a $10,000 payment that goes to your family.

So, it’s like a super basic and kinda limited insurance just to make sure you’re driving legally, but it’s not a full coverage deal.

How do I qualify for dollar-a-day insurance coverage?

To get this dollar-a-day deal, you need to be without any other car insurance in New Jersey. Also, you and everyone on the policy must be part of a Medicaid program that covers hospitalization. If you drop out of Medicaid, your dollar-a-day insurance will keep going until it’s time to renew (like, one year), then you gotta find something else.

Oh, and your driver’s license and car registration must be all good—can’t be suspended or taken away. If they are, you’re not eligible.

If you meet all these rules, you can get dollar-a-day insurance. If not, check out our guide for other cheap options.

Before you pick an insurance company, learn about the ones around you. Call them up and ask questions like “What’s the best plan for me?” or “What’s the least I need to be legal in my state?” You can even ask about discounts if you get both car and home insurance from them.

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

Alright, so if you sign up for this SAIP thing in New Jersey, you’re getting a pretty basic car insurance deal. Here’s what it covers:

  • Right after a car crash, it helps pay for emergency treatment.
  • If you have a really bad injury to your brain or spine, it might cover up to $250,000 in medical costs.
  • If the worst happens and you lose your life in a crash, there’s a $10,000 payment to your family.

But here’s the catch—unlike regular car insurance, this dollar-a-day thing doesn’t cover injuries to other people or damage to their stuff if the accident is your fault. So, you might have to pay for the other person’s medical bills and fix their car if you’re to blame.

Also, it only helps with certain injuries—like to your brain or spine. If you get other injuries, like whiplash or a broken bone, it doesn’t pay you anything.

And here’s the thing about fixing your own car. If you have normal car insurance with collision and comprehensive coverage, it helps pay for your car repairs. But with SAIP, you gotta fork out the cash for fixing your own ride.

So, it’s like a basic insurance that helps a bit, but not for everything.

Who Is Eligible for Dollar-a-Day Car Insurance?

There’s special car insurance called dollar-a-day insurance. It’s for folks in New Jersey who might not have a lot of money or face other challenges. The state wants to make sure even if you’re low on cash, you can still have some car insurance.

To get this special insurance, there are a few rules. First off, you need to be on a certain Medicaid plan—one that covers hospital stuff. You also need a valid driver’s licence, car registration, and can’t already have another car insurance plan. Each dollar-a-day insurance only covers one car, but you can add people from your house as drivers if they’re on the right Medicaid plan too.

Once you get this insurance, show your Medicaid ID card whenever it’s time to renew. If you decide to drop out of Medicaid during the insurance term, your coverage stays, but you can’t renew it.

To find out if you can get this dollar-a-day insurance, just talk to a licensed insurance agent. They’ll check if you meet the rules once you give them your Medicaid ID number. Easy peasy!

How Much Does Dollar-a-Day Insurance Cost?

So this dollar-a-day car insurance is called that because it costs $365 a year, like a buck each day. You usually pay it in two parts, but if you pay for the whole year at once, it’s a bit cheaper—$360 a year or $30 each month.

This insurance, called SAIP, is good for folks in New Jersey who don’t have a lot of money. It doesn’t care about your age, how you drive, or where you live because it’s run by the state. But because it’s already super cheap, you can’t get extra discounts or help with the cost. The only time it would cost more is if you want to use it for more than one car.

So, it’s like a simple and cheap insurance option for people who need it.

What Are the Alternatives to Dollar-a-Day Car Insurance?

This dollar-a-day insurance is pretty cheap, but it doesn’t cover a whole lot. If you feel like you need more protection while driving, there are other options in New Jersey. Let’s look at two of them:

Basic Policy:

  • You can get optional coverage of $10,000 for injuries per accident.
  • There’s $5,000 for damage to stuff per accident.
  • If you or someone else gets hurt, there’s $15,000 for medical costs.

Standard Policy:

  • You get more coverage for injuries—between $25,000 to $250,000 per person or $50,000 to $500,000 per accident.
  • For damage to stuff, it’s between $25,000 to $100,000 or even more per accident.
  • Medical costs are covered from $15,000 to $250,000 or more per person or accident.

Both plans also give you up to $250,000 in coverage for specific injuries like serious brain or spinal injuries. Now, the Basic plan covers less than the Standard one, and it comes with something called the Limitation on Lawsuit option. You can also add more coverage options like for accidents, damage, and if the other person doesn’t have enough insurance.

So, if you’re looking for more coverage, these other plans might be worth checking out.

How to Apply for a Dollar-a-Day Car Insurance Policy

So the company that offers dollar-a-day car insurance is called National Continental Insurance Company. But don’t worry, you can get this special insurance at many places that sell insurance in New Jersey.

If you’re not sure where to go, you can talk to someone at the Personal Automobile Insurance Plan (PAIP) by calling 1-800-652-2471. They can help you out. You can also find an insurance place near you that works with PAIP on the State of New Jersey website.

Now, getting this dollar-a-day insurance is pretty easy. Just take these papers to a PAIP office or an insurance place:

  • Your driver’s license.
  • The paper that shows your car is registered.
  • Your Medicaid ID card

FAQs

Certainly! Dollar-a-day insurance is allowed in New Jersey, but it’s only for people who already have Medicaid with hospital coverage. Even though it’s allowed, this type of insurance might not give you enough financial protection if you’re in an accident. It’s a good idea for drivers to choose as much coverage as they can comfortably afford to make sure they’re well protected.

What states have dollar-a-day insurance?

New Jersey is the only state offering dollar-a-day insurance, but a few other states have similar options. In California, there’s the California Low Cost Auto Insurance program. It helps low-income drivers by providing liability coverage at levels lower than the state’s usual minimum requirements, aiming to lower their insurance costs.

About The Author

Andy Walker is a freelance content writer who specializes in writing for insurance and finance related niches. He has years of experience in this field and has written extensively on a variety of topics. Andy’s work is always highly polished and well-researched, ensuring that his clients are always happy with the results.

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