New Jersey's Dollar a Day Auto Insurance Leaves Fully Paid Insurance Plans to Pay the Bill

TRENTON, N.J. — Automobile insurance in New Jersey is skyrocketing and there doesn't seem to be an end in sight. Driver's licenses for illegal aliens and this low-cost $1 per day insurance policy that puts all of the liability on properly insured and paying drivers is contributing to fueling the spike, along with increases in costs of goods and services and an increase in crashes in the Garden State. A state-sponsored auto insurance program aimed at helping low-income New Jersey drivers is drawing criticism for offering limited protection that leaves other motorists financially vulnerable after accidents. Known as the Special Automobile Insurance Policy (SAIP) — or the “Dollar-a-Day” policy — the plan is available only to New Jersey residents enrolled in Medicaid. It provides emergency personal injury protection (PIP) coverage for the insured driver, but does not cover liability, property damage, or injuries to others involved in a crash. https://twitter.com/wakeupnj/status/1943035393919594690 “This ‘insurance’ only covers any injuries of the insured. That’s right, it doesn’t cover any liability,” wrote Wake Up NJ, a community account that posted a photo of the SAIP disclaimer document and a sample Medicaid card. The SAIP program was established under New Jersey law (NJSA 39:6A-3.3) and is administered through the New Jersey Personal Automobile Insurance Plan (NJ PAIP). It is intended to help low-income residents meet the state’s minimum insurance requirements and avoid driving uninsured. But critics argue the coverage is so limited it poses a risk to others on the road. If a SAIP-covered driver causes an accident, victims may have little recourse unless they carry their own uninsured or underinsured motorist protection. One section of the addendum explicitly warns: “This policy DOES NOT provide liability (bodily injury or property damage) coverage for your loss.” Wake Up NJ claimed attorneys advise clients to buy better coverage themselves, because lawsuits against SAIP-insured drivers often go nowhere: “SAIP recipients are protected by the state of NJ,” the post said. The policy costs $365 annually and has long been promoted as a last-resort option for drivers who can’t afford traditional insurance. However, the growing use of SAIP and its legal limitations have prompted calls for reform or review. As standard insurance premiums rise across the state, some drivers are questioning why a policy offering no liability coverage is allowed on public roads.