A Guide to Auto Insurance If You’re Living Out of Your Car

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    Homelessness continues to be a serious problem in the United States. Rent and housing prices are at record highs, and now that the economy has formally entered another recession, more people face the real possibility of losing their homes. Millions of Americans have skipped rent and mortgage payments due to unemployment and income losses brought on by COVID-19.

    Studies indicate that some groups are more susceptible to homelessness than others. On any given day, over 40,000 veterans experience homelessness in the United States. LGBTQ people ages 13 to 25 are 120% more likely to become homeless than their straight peers. Furthermore, African Americans account for 40% of people experiencing homelessness, even though they make up only 13% of the general population.

    To avoid having to sleep on the street, many homeless individuals are forced to reside in the only safe space they have left: their car. Commonly referred to as “vehicular homelessness,” the number of people living in campers and other types of vehicles increased by 46% in 2018.

    If you are currently living out of your vehicle, you face a particularly challenging set of circumstances. As you work to obtain housing, you’ll need to keep your car on the road in the meantime. Most states require you to have auto insurance to legally drive your vehicle, but requirements vary state by state.

    This guide provides an auto insurance roadmap, so you can keep your vehicle in good standing while working toward a more permanent home. You’ll also find resources that can help you stay safe while living out of your car, and help transition into a more permanent place to live.

    Why you need auto insurance

    Car insurance is required in 49 states if you intend to drive a car on public roads. The only state that doesn’t require car insurance is New Hampshire. However, you must still be able to prove “financial responsibility.” If you don’t have car insurance in New Hampshire, you must be able to pay out of pocket for damages in the event of an accident.

    According to the Insurance Information Institute, all states that require auto insurance require you to carry bodily injury liability insurance and property damage liability insurance. If you are found to be driving without insurance, you could be fined. And if you’re at fault for an accident and don’t have car insurance, you will likely be liable to pay for the damages yourself.

    The amount of money your bodily injury and property damage liability insurance must cover varies by state. For example, in Alabama, you must have a $25,000 bodily injury liability limit per person, a $50,000 maximum for all bodily injuries to be paid for any one accident, and a $25,000 maximum for property damage per accident.

    It can be challenging to obtain auto insurance while living out of your vehicle. For example, you may be facing barriers to insurance because you don’t have a permanent address. Insurance companies require a permanent address because they use information about where you live in their calculations for your monthly premiums.

    Cost may also be an issue. You’ll need to be able to receive bills and pay monthly premiums to keep your insurance active, which can be difficult if you don’t have a place to receive mail or don’t have a regular income.

    Nonetheless, you may still be able to obtain auto insurance.

    Steps to get the right auto insurance for you

    Here, you’ll find the best steps you can take to obtain car insurance while living out of your car.

    • How to obtain an address: From the perspective of a car insurance company, your permanent address is the location you’ll receive mail and where your car will be parked. Some insurance companies won’t provide you with a policy if you don’t have a rental agreement or a permanent residence. If possible, ask a friend or family member if you can park your car at their home and receive your mail at their address. Even if you aren’t physically staying within their residence, this will provide you with a legitimate address and parking spot in the eyes of your insurer.Some churches and shelters may also offer to accept mail for their guests. If you regularly stay at a local shelter or park in their parking lot, ask if this is an option. Finally, you can obtain a Post Office Box to receive mail. This requires an investment, but it will give you a permanent and secure place to receive your mail. However, keep in mind that many insurers won’t view a P.O. Box as a permanent address or residence.
    • Determine the requirements of your home state: Before signing up for insurance, determine the minimum insurance requirements in your state. You can use this resource from the Insurance Information Institute to determine what your state requires. Insurance agents will also be able to tell you this information. If you have a low income or you’re unemployed, it may be best to simply obtain the minimum insurance required so you can save on monthly premiums.
    • Understand the factors that impact insurance rates: Multiple factors affect the cost of auto insurance. Your age, years of driving experience, driving history, credit score and location can all influence how much you pay in monthly premiums. For example, a younger driver who doesn’t have much experience might be considered riskier to insure, so their premiums may be higher. The safety features on your vehicle, your claims history and your annual mileage can also play a role.
    • Obtain a copy of your driving record: Before signing up for insurance, obtain a copy of your driving record. You can do so at your local DMV in person, by mail or online. Auto insurance agents may also have access to your driving record. Your driving record is a public document of your driving history and includes any offenses you may have committed, although some offenses may be dropped from your record over time.
    • Determine what coverage level you need: You should start by shopping for the minimum amount of coverage required by your state, which is usually bodily injury liability insurance and property damage liability insurance. Some states also require personal injury protection (PIP) and other types of coverage.
    • Compare car insurance rates: Finally, you should compare affordable car insurance rates before purchasing insurance. The first quote you receive may not be the best, so be on the lookout as some insurance providers may offer discounts to low-income drivers, veterans and other groups. Some state programs, such as California’s Low-Cost Auto Insurance Program, could also help you get insurance. Be sure to ask about any available discounts before signing up for a plan.

    Get your vehicle up to speed

    When inquiring about auto insurance, you’ll need to prove that your vehicle is registered in your state and legal to drive on the road. Some states require an emissions inspection, a safety inspection or both each year for a car to be considered legal. A dated sticker will be placed on your vehicle to show if it has been inspected in these states.

    However, some states do not require a safety or emissions inspection for you to drive. For example, according to AAA, Alabama requires a safety inspection only when a vehicle is transferred to a new owner. While Alaska, Arizona, Arkansas, California, Colorado and some other states have no statewide safety inspection requirements for private vehicles.

    How to get your vehicle in order

    You can obtain a “state inspection,” which provides you with a decal sticker, from almost any licensed garage, dealership or auto body shop in your state. Some shops may have specific hours in which they do state inspections, so it may save you time if you call beforehand or set up an appointment.

    State inspections are generally affordable. For example, the average cost of an inspection in New York is just $21, but prices may vary by state. If your vehicle fails the inspection the first time, you may be entitled to free inspections after fixing any issues.

    For your car to be considered “street legal” — that is, legal to drive on public roads — it must also meet some basic safety requirements. For example, every state requires your car to have seat belts, a windshield, an engine hood and mirrors so you can see behind you while driving. If any of these parts are damaged, they will likely need to be fixed before you can pass inspection.

    Even in states that don’t require inspections, you can still be pulled over if the police believe your car isn’t safe to drive. It’s a good idea to get a full inspection even if it isn’t required, then fix any serious issues with your vehicle.

    How to register your car

    Registering your car will require you to provide an address. If a friend or relative allows you to use their address as your mailing address, you should consider asking them if you can use their address to register your vehicle. If you regularly stay in a local shelter, ask if using the shelter’s address is a viable option.

    If you have an out-of-state address you can still use, you may be able to register your vehicle as a non-resident in a new state. The rules regarding registration for non-residents are different depending on the state you wish to register your vehicle.

    You may still be able to register your vehicle even if you can’t put down the address of a friend, a relative, a shelter or even a campground. For example, UPS Store mailboxes provide you with a real street address. You may be able to use this address in some states, but not all. Contact your local DMV to determine if this is an option.

    Some states, such as Nevada, have specific forms for homeless individuals so they can obtain an ID card and gain driving privileges. However, even in these states, you may not be able to register a vehicle without a physical address.

    How to overcome barriers to identification and registration

    Unfortunately, it’s challenging to register your vehicle without proper identification, and it’s difficult to obtain identification like a driver’s license without a permanent address.

    Some states are working to combat this problem by making it easier for homeless individuals to get the identification they need to drive, vote and access services.

    But in most states, you’ll need proof of residence and multiple forms of identification, such as a social security card or birth certificate, to get a driver’s license. Proof of residence usually refers to a utility bill, a recent bank account statement or a rental or mortgage agreement.

    Most states charge fees to register your vehicle and obtain identification, and registration fees vary by state.

    If you are struggling with obtaining identification and registering your vehicle, social workers, nonprofit groups and even volunteers at your local shelter may be able to help.

    Resources available to help

    Below, you’ll find additional resources that can help you stay safe and transition into a more permanent housing environment.

    United States Department of Housing and Urban Development Homeless Assistance Program

    HUD Exchange provides state-by-state resources for people who are experiencing or at risk of homelessness. These programs include Continuum of Care (CoC) programs, Emergency Solutions Grants (ESG) programs, Rural Housing Stability Assistance (RHSP) programs and more.

    Safe parking programs

    Safe parking programs provide a safe place for people experiencing vehicular homelessness to park for the night without being ticketed, towed or harassed. Most safe parking programs are based on partnerships with faith communities and nonprofits that allow homeless individuals to park in their parking lots overnight.

    Many of the safe parking programs in the U.S. are on the West Coast, but more cities are working to address this issue. Some current safe parking programs include:

    This is not a comprehensive list of safe parking programs in the United States, so if you’re interested in learning if this is an option, it’s worth researching additional safe parking programs in your area.

    Volunteers of America

    Volunteers of America helps homeless people in 46 states, the District of Columbia and Puerto Rico find housing. They also help seniors find care. You can locate a Volunteers of America office in your area by entering your ZIP code on the website.

    Transition resources

    Transition resources help homeless individuals through their transition into permanent housing by providing temporary housing and other services. Here are a few resources to consider:

    Legal resources

    The following legal resources can help you stay informed of your rights and acquire legal representation if needed:

    Emergency car repair services

    Some nonprofits and faith-based organizations can help you pay for minor car repairs:

    • ModestNeeds.org — Provides short-term financial assistance to individuals and families in temporary crisis.
    • Working Cars for Working Families — Helps working families obtain cars and keep them running.
    • Operation Homefront — Provides housing assistance and car repair help to homeless veterans and U.S. military families.
    • Wheels 4 Hope — A North Carolina organization that repairs and donates used cars.
    • The Salvation Army — Some locations provide car repair services and other types of assistance.

    Looking ahead

    If your life circumstances have made it challenging to maintain safe, affordable housing, know that your current situation does not have to be permanent. Using some of the resources above, you can keep your car on the road and obtain additional assistance as you pursue permanent housing.

    We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Michael Rand

    Contributing Writer

    Michael Rand is a business and personal finance writer based in Beverly, Massachusetts. He holds a master’s degree in writing from Salem State University and spent years producing content for financial services clients as an agency writer. His work has been featured in publications like Interest.com, The Simple Dollar, and Monetize.info.

    Reviewed by

    • Andrea Perez
      Andrea Perez
      Personal Finance Editor

      Andrea Perez is an editor at The Simple Dollar who leads our news and opinion coverage. She specializes in financial policy, banking, and investing.