Dollar a Day Insurance

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Dollar a Day Insurance

Did you know New Jersey residents may be eligible for $1 a day insurance? It’s true for those that meet certain requirements. Certain drivers in New Jersey who have Medicaid, usually qualify for a Special Automobile Insurance Policy (SAIP). Coverage under this residual market government car insurance plan tends to be around $365 a year, earning it the nickname “dollar a day insurance”.

As great as SAIP insurance coverage sounds, it’s meant to be the last resort car insurance policy. To understand why this type of policy is not as great as it sounds, you need to know what it covers and what it doesn’t cover. You should also be aware of the application process, paying for it, and the specific eligibility requirements. Everything you need to know is explained below.

dollar a day insurance

The Story Behind SAIP

SAIP was created by the Department of Banking Insurance to help low-income New Jersey residents. Many drivers went without car insurance because they couldn’t afford it. This created a dangerous situation, with many uninsured motorists. The program allows NJ residents coverage for medical costs if they are involved in an accident. This was meant to reduce the number of accidents that result in unpaid medical bills and also lawsuits.

What is Covered by SAIP Insurance?

First, the most important thing to know about a SAIP is that you may not be driving legally, even if you have received proof of insurance. The reason is that SAIP insurance coverage is extremely limited and doesn’t meet NJ’s minimum auto insurance requirements for most drivers.

Here is what’s covered by SAIP Coverage:

Emergency treatment for the policyholder, usually received in the emergency room, immediately after the accident. If the SAIP policyholder requires treatment for a critical injury to the brain or spinal cord, it is also covered. However, there is a $250,000 policy limit for medical coverage.

If the policyholder dies in an accident, the family will receive a $10,000 death benefit, which equates to the cost of the average funeral.

What is Not Covered by SAIP Insurance

SAIP insurance does not include any liability coverage, which is necessary to pay for damages and injuries to others. It also does not cover the cost of ongoing treatment for injuries suffered by the policyholder or the cost of damages to the policyholder’s vehicle.

What Will the Policyholder be Responsible For?

As the policyholder, you will be responsible for the following.

  • Any non-emergency or ongoing treatment that doesn’t apply to your brain or spinal cord. You do have the option of requesting that Medicaid pay for your treatment, but you will have to navigate this process on your own.
  • All injuries suffered by other parties in the accident if you are determined to be at fault. If the other driver or an injured passenger sues you, SAIP insurance will not pay for any legal fees.
  • Any damage to your vehicle or property, regardless of who was at fault.
  • Any damages to the other vehicle or property, if you were determined to be at fault.

Applying for SAIP

SAIP coverage can be purchased from most New Jersey insurance company agents, even though the National Continental Insurance Company is the insurer that writes this type of policy. To make it easy to find an agent, the state allows you to do a county search.

To apply you must meet the following criteria:?

  • You must be a New Jersey Resident
  • You must currently be an uninsured driver in NJ. If you have a car insurance policy already, you are not eligible.
  • You, as well as any members of your household who will be covered by the policy, must be enrolled in a Medicaid program that INCLUDES hospitalization.
  • Your must have a driver’s license and registration that is in good standing. If you have had either suspended or revoked in the past, you will not be eligible for SAIP coverage.

To confirm that you are eligible and to purchase a SAIP policy, you must provide your insurance agent with your driver’s license and your Medicaid identification card.
The fact that you simply qualify for Medicaid is not enough to purchase SAIP coverage. If your Medicaid enrollment ends, your SAIP coverage will remain in place until your next renewal. You will need to secure alternative car insurance coverage by then. If you currently qualify for Medicaid but have not signed up for it, you will have to do so before you can be considered for SAIP coverage.

Paying for SAIP Coverage

In NJ, SAIP coverage is $1 a day or $365 per year. If you can pay for the entire year in a single lump-sum payment, the cost will only be $360. If you cannot pay the full amount, you can divide the $365 policy into two installments.

If you were to have multiple cars covered by a SAIP, you would have to pay for each one separately. Each policy only insures one car. In other words, each vehicle that you want to have covered must have it’s own $365 SAIP. It’s important to note that the cost of SAIP doesn’t change, regardless of your driving record or any other criteria.

Supplementing SAIP

Unfortunately, you cannot have any other type of car insurance policy on a vehicle that is covered by SAIP. For example, you cannot rely on SAIP to pay your medical expenses and another insurance company for your property damage liability. If you feel that property damage liability coverage is absolutely essential in your situation, SAIP is not for you.

Is SAIP Your Best Option for Car Insurance?

When you consider what little SAIP covers and the fact that it doesn’t meet NJ’s minimum insurance requirements, it is pretty obvious that this a policy you should only take out as a last resort. While $1 dollar a day insurance sounds tempting, this limited coverage could cost you if you get into a serious accident.

We strongly suggest that you compare car insurance quotes among several insurance companies before you purchase NJ SAIP coverage. Keep in mind that quotes are free and policies may be much more affordable than you think, especially if you have a clean driving record. Enter your zip code and compare New Jersey auto insurance quotes.