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.

"[NJ SAIP] 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?

SAIP covers only emergency medical treatment for you, with limited coverage for serious brain and spinal cord injuries and a death benefit. It doesn’t meet New Jersey car insurance requirements and doesn’t include liability, uninsured motorist coverage or coverage for your vehicle. 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 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 does not include:

Uninsured/underinsured motorist coverage
Comprehensive
Collision

SAIP vs. New Jersey state minimum coverage

SAIP does not include the same coverages as a state minimum policy or a basic policy. Compare the three policies before making a purchase.

Feature	SAIP (Dollar-a-day)	Standard minimum coverage	Basic policy
Annual cost	$360 to $365	$853 average	Varies; in between SAIP and standard
Meets NJ minimum requirements	No	Yes	Yes
Bodily injury liability	Not included	$35,000 per person/$70,000 per accident	Optional at $10,000 per accident
Property damage liability	Not included	$25,000 per accident	$5,000 per accident
Uninsured/underinsured motorist coverage	Not available	Available up to liability limits	Not available
Personal injury protection	Included (emergency and serious injuries only)	$15,000 $250,000 for serious injuries	$15,000 $250,000 for serious injuries
Death benefit	$10,000	$1,000	$1,000
Eligibility requirement	Federal Medicaid with hospitalization, valid NJ license	Valid driver's license	Valid driver's license
Payment options	Two payments or in full	Varies by insurer, in-full and monthly payments typically available	Varies by insurer, in-full and monthly payments typically available

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.

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

Yes. The SAIP costs drivers $365 annually, or $1 per day if paid in two installments. There is a $5 discount for paying in full. This is significantly cheaper than a state minimum policy, which costs an average of $853 a year. Unlike a traditional policy, drivers can’t make monthly payments, and no discounts are available.

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?

New Jersey drivers who do not qualify for SAIP or want more coverage have two alternatives: a standard minimum coverage policy or a basic car insurance policy.

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

Drivers who qualify for SAIP but want liability coverage should request quotes for a basic policy, which starts at $5,000 in property damage liability, before committing to SAIP. Quotes can be compared through New Jersey's Personal Automobile Insurance Plan (PAIP) at 1-800-652-2471.

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 the state's minimum car insurance requirements. Drivers with only SAIP coverage are personally responsible for damages and injuries they cause in an accident.

Is dollar-a-day auto insurance worth it?

Dollar-a-day car insurance is not worth it for most drivers because it does not meet New Jersey's minimum car insurance requirements and provides no liability coverage. At $365 per year, it is the cheapest option available, but it should only be considered by drivers who cannot obtain coverage from any other source.

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.