California Insurance Commissioner Steve Poizner has announced his final determination of the need for the California Low Cost Automobile Insurance program in Merced and Tulare counties. The announcement follows recent town hall meetings where the Commissioner sought feedback on the program, which provides eligible low-income, good drivers with access to state-required liability insurance for under $400 a year. The program is expected to go into effect in the spring, once rates are set in each of the newly added counties.
Senate Bill 20 authorizes the Commissioner to launch the program throughout California based upon his determination of need. Within Poizner held public meetings in Merced and Tulare counties and made a final determination to extend the program to those counties, based on certain factors, including consideration of the number or percentage of uninsured motorists, the size of the low-income population, the price of insurance in the voluntary market, and the public’s expression of interest in the program. A final determination of need for the program in Monterey, Santa Barbara, Sonoma, and Ventura counties was previously announced and will also be part of the expansion.
“State law requires that all drivers be insured,” said Commissioner Poizner. “Unfortunately, more than 160,000 motorists in Merced, Monterey, Santa Barbara, Sonoma, Tulare and Ventura counties are traveling the roadways without insurance,” he said. “This is a crisis. Many drivers simply cannot afford insurance, but they are placing themselves and fellow residents at risk when they drive. The goal of this program is to reduce the number of uninsured drivers hitting our roadways everyday, while making auto insurance affordable and available.”
Poizner also noted that motorists that without insurance could have their vehicle registrations suspended as part of SB 1500, a new law designed to reduce the risk of economic losses sustained as the result of collisions involving uninsured motorists.
To be eligible for CLCA, applicants must be a “good driver,” which means 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 ($24,500 for a single person, $33,000 for two persons and $50,000 for a family of four). The value of an insured vehicle must not exceed $20,000. Since inception of the program, more than 29,000 policies have been issued.