Low Cost Auto Insurance Program Available Statewide

SACRAMENTO – Insurance Commissioner Steve Poizner today announced that qualified low-income drivers in every California County now have access to affordable automobile insurance. Since he was elected to office in January, Commissioner Poizner has worked tirelessly to expand the California Low Cost Automobile Insurance (CLCA) program to the entire state.

"The expansion of this program to the entire state was one of my top priorities when I became Insurance Commissioner," said Poizner. "Many drivers simply cannot afford insurance, but driving without insurance is illegal and puts all motorists at risk. The expansion of this program means the eligible drivers throughout California will now have an affordable insurance option. This program will better enable Californians to comply with the law and protect all motorists from potential losses."

In August, Commissioner Poizner announced his plans to complete the expansion of the CLCA program to the sixteen remaining counties of: Alpine, Colusa, Del Norte, Glenn, Inyo, Lassen, Mariposa, Modoc, Mono, Nevada, Plumas, San Luis Obispo, Sierra, Siskiyou, Tehama, and Trinity. The Commissioner held a series of community town hall meetings in each of the expansion counties to examine the need for the program. Based on community feedback and a determination of need analysis conducted by the California Department of Insurance, the Commissioner determined that the program should be expanded to these counties, to bring the program to every county in the State of California. The Commissioner’s announcement today is made after receiving emergency regulatory approval for rates for each of the sixteen counties.

Motorists driving without insurance can have their vehicle registrations suspended by the Department of Motor Vehicles under SB 1500, effective January 1, 2006, as part of legislation designed to reduce the risk of economic losses sustained as the result of collisions involving uninsured motorists.

The low cost auto insurance program provides eligible low-income good drivers with auto liability coverage, currently for under $400 a year and as little as under $300 a year in many counties. Since its inception, 36,761 policies have been issued. Program policies are issued by California licensed insurers and the program is administered by the California Automobile Assigned Risk Plan.

The California Low Cost Automobile Insurance Program is 100% unsubsidized by taxpayers. The program is self-sustaining. Rates are set in each county so that premiums are sufficient to cover losses and expenses in each county.

The California Low Cost Automobile Insurance Program was established in 1999 as a pilot program in Los Angeles and San Francisco. A new law, SB 20, passed in 2005, authorized the Commissioner to launch the program throughout the state upon his determination of need in each county. Beginning in April 2006, the department began expanding the program statewide.

To be eligible for the program, an applicant must be a "good driver" – no more than one at-fault property damage only accident, or one point for a moving violation in the past three years; and no at-fault accident involving bodily injury or death in the past three years; and no felony or misdemeanor conviction for a violation of the Vehicle Code.

Additionally, family income cannot exceed 250 percent of the federal poverty level ($25,525 for a single person, $34,225 for two persons and $51,625 for a family of four). The value of an insured vehicle must not exceed $20,000. For more information about the program, call 1-866-60-AUTO-1 (1-866-602-8861).

Source: California Department of Insurance