California Low Cost Auto Insurance Program - Frequently Asked Questions
Answers to common questions about California's Low Cost Auto Insurance Program
California Drivers Pay Less for Car Insurance!
WHAT IS IT?
A program established by the California Legislature that provides low-income good drivers who live in California with low cost auto insurance coverage. This pilot program became effective on July 1, 2000, for qualified residents of Los Angeles County and the City and County of San Francisco.
§ On April 1, 2006, the Program was expanded to qualified residents of Alameda, Fresno, Orange, Riverside, San Bernardino and San Diego counties.
§ On June 1, 2006, eight additional counties were added to the Program: Contra Costa, Imperial, Kern, Sacramento, San Joaquin, San Mateo, Santa Clara and Stanislaus, for a total of sixteen eligible counties.
§ On March 30, 2007, the six additional counties of Merced, Monterey, Santa Barbara, Sonoma, Tulare and Ventura were added for a total of 22 eligible counties.
§ On October 1, 2007, 20 new counties were added: Amador, Butte, Calaveras, El Dorado, Humboldt, Kings, Lake, Madera, Marin, Mendocino, Napa, Placer, San Benito, Santa Cruz, Shasta, Solano, Sutter, Tuolumne, Yolo and Yuba will join the current counties of Alameda, Contra Costa, Fresno, Imperial, Kern, Los Angeles, Merced, Monterey, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Barbara, Santa Clara, Sonoma, Stanislaus, Tulare and Ventura.
§ On December 10, 2007, the final 16 counties of Alpine, Colusa, Del Norte, Glenn, Inyo, Lassen, Mariposa, Modoc, Mono, Nevada, Plumas, San Luis Obispo, Sierra, Siskiyou, Tehama and Trinity were added, making it a statewide Program
The California Low Cost Automobile Insurance Program (LCA) is administered by the California Automobile Assigned Risk Plan (CAARP).
WHO IS ELIGIBLE?
Only low-income good drivers are eligible for this coverage. Applicants also must reside in one of the approved counties, and the current value of their vehicle cannot exceed $20,000. Eligibility is based on the household's gross annual income which must be 250% or less of the federal poverty level. See chart below.
APPLICANT INCOME ELIGIBILITY CHART | ||
Number in Household * | Poverty Income Level | 250% of Federal Poverty Level |
1 | $10,210 | $25,625 |
2 | $13,690 | $34,225 |
3 | $17,170 | $42,925 |
4 | $20,650 | $51,625 |
5 | $24,130 | $60,325 |
6 | $27,610 | $69,025 |
7 | $31,090 | $77,725 |
8 | $34,570 | $86,425 |
For households with more than 8 members, add $3,480 for each additional member to the figure shown in the Poverty Guideline. Multiply the result by 250%.
· A "Household" is all persons who occupy a housing unit and who are related by blood, marriage, adoption or guardianship (i.e., members of one family). If more than one family is living in the same housing unit, they constitute different families for eligibility purposes even though they reside at the same address
The Federal Poverty Guidelines are released annually by the Department of Health and Human Services. | ||
WHAT IS A "GOOD DRIVER"?
§ Applicant is at least 19 years of age and has been continuously licensed to drive for the past 3 years.*
§ Applicant has no Vehicle Code felony or misdemeanor convictions on their driving record.
§ Applicant has not had an at fault accident involving bodily injury or death in the past 3 years.
§ Applicant has not had more than one, or both, of the following in the past 3 years:
o A property damage only accident in which they were principally at fault, or
o A point for a moving violation.
§ Applicant is not a college student claimed as dependent of for federal/state income tax purposes.
o Individuals who were previously licensed in another country other than the U.S. or Canada and can demonstrate that they have been continuously licensed for 18 months in the U.S. or Canada, are also eligible.
WHAT COVERAGES ARE AVAILABLE?
Liability limits of $10,000 bodily injury or death per person, $20,000 bodily injury for each accident and $3,000 property damage for each accident. These limits will satisfy the state's current financial responsibility laws. Medical Payments Coverage at $1,000 per person, and Uninsured Motorist Bodily Injury at limits of $10,000/$20,000, are also available at the option of the applicant.
Physical Damage (Comprehensive & Collision) coverage IS NOT available under this Program.
WHAT DOES IT COST?
WHAT ARE THE PAYMENTS PLANS?
PAYMENT OPTIONS | |
Full Annual Premium | |
$125 Deposit with balance to be paid within 30 days. | |
Option 1 | $100 Deposit with balance to be paid in 6 bi-monthly installments.* |
Option 2 | $125 Deposit with balance to be paid in 5 bi-monthly installments.* |
Option 3 | 15% Deposit with balance to be paid in 6 bi-monthly installments.* |
* There will be a $4.00 per installment fee for Payment Options 1, 2 & 3. Bi-monthly means every other month a payment is due. No Outside Premium Financing is allowed! | |
HOW DOES ONE APPLY?
If you meet the eligibility requirements, contact any insurance agent and ask if they are a Certified Producer with the California Automobile Assigned Risk Plan/California Low Cost Automobile Insurance Program. If they are certified, they can help you in applying for automobile liability insurance through the California Low Cost Automobile Insurance Program. This individual can assist you in completing an application and tell you about the payment plan options.
- If you need a list of certified producers in your area, contact CAARP's Customer Service Department at their toll free number 866-602-8861.
Once you find a certified producer in your area, they will help you complete an application for insurance, plus collect the required deposit and documents needed for this Program.
Once the producer has completed the application, they will mail everything to the CAARP office in San Francisco.
WHAT DO I NEED TO GIVE MY AGENT?
Applicants will have to provide income verification in the form of one of the following:
A copy of their federal or state income tax return if filed in the previous calendar year, or if filed in the current year, whichever is most recent, or
Other reliable evidence from a governmental agency or government means tested program verifying the applicant's annual gross income.
Applicants must also provide:
Check or money order made payable to CAARP/CA Low Cost Program
Copy of the driver's license for ALL drivers in the household
Copy of the vehicle registration or proof of vehicle ownership.
Signed Privacy Waiver Form for each member of the household 18 years of age or older. This form ensures that your total household income can be verified.
NOTE You can pay CAARP/Low Cost Program directly. Your agent/producer does not have to submit their check on your behalf.
CAN THE PRODUCER CHARGE EXTRA FEES?
No. Per 11624.5 of the California Insurance Code, producers CANNOT charge their clients ANY fee when submitting an application through the California Low Cost Automobile Insurance Program. The producer will be paid commission by the assigned insurance company. This means no "broker fees", "paperwork fees", or MVR fees can be charged.
WHEN IS COVERAGE EFFECTIVE?
Only Certified Producers may submit applications to the California Low Cost Automobile Insurance Program and obtain immediate coverage through CAARP's Electronic Effective Date Procedure (EEDP) or through EASi. Proposed effective dates are only honored if the producer complies with all of the rules governing the EEDP and/or EASi.
Applications submitted without using the EEDP or EASi will become effective at 12:01 A.M. the day after receipt in CAARP's office. Future effective dates are also available via the EEDP and EASi. To receive a future effective date, CAARP must receive the application before that requested date.
HOW LONG WILL IT TAKE BEFORE I KNOW I AM INSURED?
Once CAARP receives the application with attached documents and deposit, it will determine whether or not the applicant is eligible per the requirements of the Program. There are 3 possible scenarios:
1. Applicant is determined to be eligible and application with deposit is assigned to an insurance company. Assignment notices are mailed to both producer and inured. The Insurance Company receives the application, attached documents and deposit.
2. Applicant is temporarily determined to be eligible, but required information/documentation is missing. Application is RETURNED to the producer to complete or attach the missing information within 10 working days. If missing information is returned within the 10-day time span and satisfies the requirements of the Program, the application will be assigned.
3. Applicant is determined to be not eligible and application for insurance is REJECTED. Both applicant and producer will be notified in writing with the reason(s) for rejection and the application with deposit will be returned to the producer of record. THERE WILL BE NO COVERAGE. Note: If producer uses EASi, the system will determine immediately whether the applicant is eligible.
WHEN CAN A COMPANY CANCEL?
Like with any insurance, the Low Cost policy can be canceled if the applicant fails to pay their premiums, or if the company determines there is any fraud or misrepresentation.
CAN I CHOOSE THE ASSIGNED COMPANY?
No. Applications are assigned via a random assignment process.
CAN THE PRODUCER RETAIN COMMISSION?
No. The producer is required to send the application with the appropriate gross deposit premium to the Plan. The assigned insurance company will pay the producer his/her commission upon issuance of the policy.
WHERE DO I REPORT A CLAIM?
Each company sends information with every policy about how and where to report claims. Contact the company directly as soon as information about a claim is known.
WHAT SHOULD I DO IF I HAVE A PROBLEM?
If you experience a problem with the assigned company or your producer regarding your insurance, it is recommended to call the company or producer directly to try and solve the problem. If the problem cannot be resolved, contact CAARP/LCA Program at 866-602-8861 and a customer service representative will try to assist you. Se Habla Espanol !
WHAT ELSE DO I NEED TO KNOW ABOUT THIS PROGRAM?
- There is a maximum of one car per Low Cost Auto Insurance policy. (You cannot add other cars to an existing policy.)
- Only two Low Cost policies can be purchased per person, per household.
- The policy term is for one year with annual renewals. If the applicant still meets all of the eligibility requirements at renewal, the company must offer a renewal.
- A Low Cost policyholder cannot purchase additional liability insurance coverage for their covered vehicle(s), but they can purchase physical damage coverage elsewhere.
Source: Insurance Information Network of California - iinc.org
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