Calif. Expands Low-Cost Auto Program to Three Counties

March 1, 2006

California Insurance Commissioner Garamendi has announced the expansion of the California Low Cost Automobile Insurance program to Sacramento, San Joaquin and Contra Costa counties. The announcement follows his final determination that the program, which provides eligible low income good drivers with state-required liability insurance for under $400 a year, is necessary and desirable in those counties.

Recent legislation, Senate Bill 20 (Escutia), sponsored by the Commissioner, expanded the program to the counties of Alameda, Fresno, Orange, Riverside, San Bernardino and San Diego, effective April 1, 2006. The legislation also authorized the Commissioner to launch the program throughout the state based upon his determination of need and a public meeting to solicit public input. The Commissioner announced his plans last month to expand the program to eight additional counties: Sacramento, San Joaquin, Contra Costa, Santa Clara, San Mateo, Kern, Imperial, and Stanislaus.

“More than 3 million motorists travel on California roads every day without auto insurance,” said Commissioner Garamendi. “We must address this dangerous problem. This program is an affordable option for qualified low-income drivers. Why risk driving without insurance when you can afford it?”

Sen. Martha Escutia, (D-Montebello), agreed. “It’s clear that the high cost of purchasing auto insurance coverage today is closing the door to good working families that want to meet California’s financial responsibility laws,” Sen. Escutia said. “The expansion of the Low Cost Auto Insurance Program to additional California counties is a blessing for many working families who are searching for affordable auto insurance.”

On January 31, 2006, the Commissioner held town hall meetings in Sacramento and Stockton (San Joaquin county), and on February 8th in Richmond (Contra Costa). The meetings were designed to gauge the need and benefits of the program in those respective areas. “Local leaders and residents were enthusiastic about the program. They couldn’t wait for it to be available in their communities,” said the Commissioner.

Town hall meetings were also recently held in Santa Clara, San Mateo and Imperial counties. The Commissioner’s final determination on expanding the program to those communities is expected shortly. Other town hall meetings are tentatively scheduled in Modesto (Stanislaus) on March 8 and Kern County on March 13th.

“Based on certain factors, including a 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, I have determined that the program is needed in Sacramento, San Joaquin and Contra Costa counties,” said Commissioner Garamendi. “We anticipate having the program established and operational in these counties by summer 2006.”

The California Low Cost Automobile Insurance program was created in 1999 to provide low-income good drivers with access to affordable automobile insurance. Currently, the program is only available in Los Angeles and San Francisco counties. With the additional counties permitted by SB 20, eligible motorists from 16 counties will soon be able to take advantage of the program. Program policies are issued by California licensed insurers and the program is administered by the California Automobile Assigned Risk Plan. Rates are set in each county so that premiums are sufficient to cover losses and expenses in each county.

To be eligible for the program, applicants must be a “good driver” – no more than one at-fault property damage only accident, or one point for a moving violation in past three years; and no at-fault accident involving bodily injury or death in 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 ($23,925 for a single person, 32,075 for two persons and 48,375 for a family of four). The value of an insured vehicle must not exceed $20,000. For more information about the program, call (866) 60-AUTO-1 (866) 602-8861.

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