Insurance Commissioner John Garamendi announced the initial results of the aggressive outreach campaign launched in August 2004 to enroll eligible Los Angeles drivers in the California Low Cost Auto Insurance Program (LCA).
Garamendi also announced California Department of Insurance- (CDI) sponsored legislation to expand LCA within Los Angeles and San Francisco, as well as launch LCA in six other counties: Riverside and San Bernardino, San Diego, Orange, Alameda, and Fresno.
The large response generated from the outreach campaign pointed to a greater, unmet need for LCA. In recognition of this, Senator Martha Escutia introduced Senate Bill (SB) 20 to expand the program. The LCA policy is a private insurance policy administered by the California Automobile Assigned Risk Plan; it is not subsidized or otherwise supported by government funding.
Under SB 20, LCA would:
Expand its scope by eliminating the vehicle value criteria – the bare-bones policy is for liability only, making the vehicle’s value not a factor in establishing risk;
Expand its breadth by eliminating the maximum policies per household – this would reflect the multi-generational home life of many would-be clients;
Become permanent by eliminating the program’s sunset, which is currently January 1, 2007.
“So long as we are authorizing the continued requirement that drivers carry insurance, we must do everything to ensure that people of limited means have an opportunity to comply with the law,” stated Escutia. Had SB 20 been in place in 2003, more than one-third of ineligible low income drivers would have qualified for the LCA program.
Since the August re-launch, the program has:
Generated more than 7,500 new inquiries;
Processed more than 3,200 applications;
Approved 83 percent of new applicants in time for the holidays;
Achieved a 26 percent increase in policies assigned compared to CY 2003; and
Averaged 1,900 new inquiries per month – compared to 820 average inquiries per month for the previous seven months.
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