Dollar-a-day insurance: What you need to know

What is dollar-a-day insurance?

Dollar-a-day car insurance is a state-run program offered by New Jersey to drivers who cannot afford traditional coverage. However, drivers must meet specific qualifications, and medical coverage is minimal.

It’s officially known as SAIP but is often called dollar-a-day car insurance because it costs $365 a year.

"The NJ SAIP is designed to meet the state’s requirement for having a registered vehicle “insured” for those drivers who are eligible. Eligibility is tied to the state assistance/Medicaid program. It does not provide any liability, uninsured/underinsured, or physical damage coverage. This makes the driver personally responsible for any injury or damage to others, including damage to their own vehicle," says Jim Defrates, agent with Defrates Insurance in Audubon, New Jersey.

The coverage is only for injuries to the insured person and is not meant to replace Medicaid in an accident.

"The only benefit provided is NJ personal injury protectionPersonal injury protection (PIP) pays for your medical, hospital and funeral expenses resulting from a car accident, regardless of who's at fault. for the driver’s injuries in an auto accident. This coverage is normally initial and temporary, as the medical costs are eventually picked up by Medicaid," he says.

What does dollar-a-day insurance cover?

A SAIP offers limited medical coverage for qualifying drivers. It does not include any traditional car insurance coverage.

SAIP coverage includes:

Emergency medical treatment after an accident
Treatment of serious brain and spinal cord injuries, with a $250,000 limit
$10,000 death benefit

It’s important to note that SAIP doesn’t meet New Jersey car insurance requirements and doesn’t include liability or other coverages. New Jersey operates under a no-fault system, which means your insurance policy pays for your injuries regardless of who caused the accident. However, drivers are held financially responsible for damages caused during an accident.

SAIP vs. New Jersey state minimum coverage vs. full coverage

Compare the SAIP policy to other options below.

Coverage type	SAIP	NJ minimum	Full coverage
Emergency medical (your injuries)	Yes	Yes	Yes
Liability (injuries/damage to others)	No	Yes	Yes
Collision/Comprehensive (damage to your vehicle)	No	Yes	Yes
Death benefit	Yes	Yes	Yes

Who qualifies for dollar-a-day car insurance?

New Jersey drivers qualify for SAIP if they:

Carry federal Medicaid with hospitalization benefits. However, not all Medicaid recipients are eligible.
Don’t have another auto insurance policy.
Have a valid license, not suspended or revoked.

Additionally:

If your Medicaid coverage changes mid-term, your SAIP policy won’t be canceled, but you won’t be eligible to renew your policy.
Only one vehicle per household is eligible for an SAIP, even if multiple family members qualify for the program.
Drivers with a revoked or suspended license aren’t eligible for the SAIP program..

Does dollar-a-day car insurance really cost one dollar a day?

Yes. The SAIP costs drivers $365 annually if paid in two installments or $360 in full. Unlike a traditional policy, drivers can’t make monthly payments, and no discounts are available.

New Jersey’s dollar-a-day car insurance, administered by the state, offers a budget-friendly alternative to drivers who might otherwise struggle to afford coverage. While minimum car insurance coverage is more affordable than full coverage, it’s significantly higher than the SAIP at an average cost of $853 a year.

How to apply for dollar-a-day car insurance

To obtain coverage:

Pay the $365 annual premium.
Confirm you are eligible.
Contact the Personal Automobile Insurance Plan (PAIP) customer service number at 1-800-652-2471 or search for a producer on the New Jersey state website.
Provide:
- A valid driver’s license
- Vehicle registration
- A Medicaid identification card showing all drivers included on the car insurance policy.

Who should consider or avoid dollar-a-day car insurance?

Dollar-a-day car insurance is not for everyone; in fact, it is really only for a very select group of people. Consider it if:

You qualify
You drive very little
You are prepared to take on the risk of being liable for an accident

You should not consider it if:

You drive regularly
You have a car loan requiring full coverage
Others drive your car

Are there alternatives to a dollar-a-day car insurance policy?

Consider these options to find affordable car insurance if you don’t qualify for SAIP or need more coverage.

Minimum coverage policy. A minimum coverage policy is cheaper than full coverage, but doesn’t cover your damages after an accident. A standard minimum coverage policy includes:
- $30,000 bodily injury liability coverage per person
- $70,000 bodily injury liability coverage per accident
- $35,000 property damage liability coverage per accident
- $15,000 personal injury protection (PIP)

A basic policy. New Jersey drivers can also choose a cheaper, basic car insurance policy, which limits their right to sue after an accident and includes only:
- $5,000 in property damage liability
- $15,000 in personal injury protection

Usage-based or pay-per-mile insurance. Sign up for a usage-based plan that offers a discount for safe driving habits. Or, consider a pay-per-mile plan that charges you for the miles you actually drive. These plans are best for:
- People who drive very little
- Safe drivers

To find the most affordable car insurance, compare quotes from multiple insurers. Each insurer has its own formula for calculating rates, so rates vary significantly.

FAQ: Dollar-a-day insurance

Do the changes in New Jersey's state minimum affect dollar-a-day coverage?

No. The SAIP car insurance program is not affected by the increase in the New Jersey minimum limits.

Where is dollar-a-day insurance available?

New Jersey is the only state with a dollar-a-day car insurance policy. However, coverage is only available to state residents with Medicaid and hospitalization benefits.

Is dollar-a-day auto insurance legal?

SAIP is legal in New Jersey but does not meet state car insurance requirements. Therefore, drivers with SAIP coverage may be liable for damages and injuries caused in an accident.

Is dollar-a-day auto insurance worth it?

Dollar-a-day car insurance in New Jersey should be a last resort for drivers who cannot acquire coverage from traditional sources. While it is the cheapest car insurance coverage available for drivers, it doesn’t meet NJ minimum requirements and offers limited medical coverage. Drivers who can afford more coverage should consider a more traditional policy.

What isn't covered by dollar-a-day car insurance?

Dollar-a-day car insurance doesn’t offer liability, collision or comprehensive coverage. So, if you cause an accident, bodily injuries and property damage to others aren’t covered. Additionally, some injuries and damages you and your passengers suffer aren’t covered either. This lack of coverage may lead to financial burdens after an accident.

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