California’s Low Cost Auto Insurance Program

Published on

In an
effort to stem the tide of uninsured drivers in California and offer a
low priced insurance policy for the poor, state legislators created the
California Low Cost Automobile Insurance Program.

The pilot program was launched on July 1, 2000 for San Francisco and
Los Angeles county drivers. As of December 12, 2007, the Low Cost
Automobile insurance program is available statewide. Click on the map
to view premium by county.

Through the program, insurance companies are required to offer a
reduced auto liability insurance policy costing roughly $350 a year in
Los Angeles and $336 a year in San Francisco to motorists with good
driving records whose gross annual incomes are less than 250 percent of
the federal poverty level (approximately $50,000 annually for a family
of four).

California law currently requires that drivers carry a minimum of
$15,000 per person for bodily injury liability coverage, $30,000 per
incident and $5,000 for property damage. In order to lower the price of
the policy, legislators allowed it to carry lower standard limits of
$10,000, $20,000 and $3,000, respectively.

Other requirements for drivers seeking the policy include:

·The driver must be at least 19 years
old and have been driving for at least three consecutive years;

·Insurance applicants may have no
more than one property-damage-only insurance claim in which they were at
fault or one point for a moving violation within the last three years;

·The car being insured may not be
worth more than $20,000;

·The insured may not be a college
student claimed as a dependent for federal or state income tax purposes;

·The driver cannot have an in-force
liability insurance policy for another vehicle.

There is also a 25 percent surcharge for unmarried males between the
ages of 19 and 24, because this population segment represents the
highest driving risk.

Competitive auto insurance rates in California may mean that
additional coverage beyond the reduced liability limits of the LCA
program are available through the private auto insurance market. It is
important to consult with your insurance carrier or agent to find the
policy that works best for your individual needs.

The Low Cost Auto Insurance Program is administered by the California
Auto Assigned Risk Program (CAARP). For more information, call CAARP at
(866) 602-8861. 

Additional resources:

California Low
Cost Auto Insurance Program

California Department of Insurance

Does It Cost?  LCA Premium By County

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