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5 Downsides to Dollar-a-Day Car Insurance in New Jersey

Amy Danise

Does dollar-a-day car insurance in New Jersey sound too good to be true? It’s true, but it’s not very good.

The Special Automobile Insurance Policy (SAIP) offered in New Jersey is often called dollar-a-day car insurance because it costs $365 a year, paid in two installments ($360 if you pay in full upfront). It’s a policy designed for very low-income drivers who would otherwise likely drive uninsured.

Dollar-a-day car insurance in New Jersey provides very limited medical benefits and is available only to certain people. Here are five downsides.

  1. Not everyone will qualify. Only New Jersey residents who have federal Medicaid with hospitalization are eligible to buy dollar-a-day car insurance in New Jersey.
  2. Medical coverage is very limited. A SAIP policy covers only emergency treatment after a car accident and the treatment of serious brain and spinal cord injuries, up to $250,000. It also has a $10,000 death benefit.
  3. It doesn’t provide liability insurance. New Jersey requires three types of auto insurance for most car owners: liability, personal injury protection (PIP) and uninsured motorist coverage. Dollar-a-day car insurance does not include any of these, but having it does make you legal to drive in New Jersey. Still, you can be personally responsible for any damage or injuries you cause to others because SAIP lacks liability coverage.
  4. It won’t cover collision damage to your own car. SAIP does not include collision insurance. So if you accidentally back into a pole, your car damage is not covered.
  5. It won’t cover car theft. SAIP doesn’t include comprehensive coverage, which pays for car theft and problems such as car fires and flood damage.

So what’s the upside to New Jersey dollar-a-day car insurance?

The policy is a last-resort choice but can provide some medical benefits that drivers otherwise wouldn’t have. For those who qualify, it creates a loophole so they can legally drive without liability insurance.

Where do I get it?

You can get a dollar-a-day SAIP policy through most New Jersey auto insurance agencies. If you need help, call the Personal Automobile Insurance Plan (PAIP) customer service number at 800-652-2471. New Jersey also provides an online search for PAIP agents who can help.

What are cheap alternatives?

Because SAIP has such limited benefits, or you may not qualify, it’s worthwhile to look into other ways to get cheap car insurance in New Jersey:

  • New Jersey also allows a “basic” auto insurance policy that is cheaper than a standard policy because it provides less coverage than the state minimum requirements. You can get a small amount of liability and personal injury protection coverage with a “basic” policy. The option was created in order to get more New Jersey drivers insured.
  • Shop around for a standard New Jersey policy that at least meets the state’s minimum insurance limits. Comparing auto insurance quotes from multiple companies is one of the best ways to find cheap insurance.