Jones Bill to Extend California’s Low-Cost Auto Insurance Program Approved by State Assembly

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SACRAMENTO – The California State Assembly today approved
legislation to extend California´s Low-Cost Automobile Insurance program
through 2016.

Assembly Bill 1597, authored by Assemblymember Dave Jones
(D-Sacramento), was approved with a bi-partisan vote of 73-3.

"Extending the low-cost auto insurance program is vitally important in
these tough economic times. Low-income drivers with good driving records
deserve the chance to obtain affordable auto insurance," said Jones.

Interest in the program is surging due to the economic downturn — the
program saw an 18.9 percent increase in use last year. The Department of
Insurance reports that much of the new interest is from rural counties
with minimal public transit services.

A number of programmatic reforms and statutory changes address the
Governor´s veto of a similar 2009 measure, including:

Better targeting of advertising;

Providing hotline callers with the names of three qualified agents
immediately, instead of mailing callers a list; and

Augmenting the "success indicators" for the program to include
situations when the program´s advertising prompts an uninsured motorist
to visit an insurance agent and obtain a policy that is better than the
CLCA policy.

California law requires motorists to have auto insurance, but some
low-income drivers cannot afford traditional auto insurance. The program
was created to provide low-cost liability insurance to good drivers who
earn an income that is up to 250% of the federal poverty level. For a
family of four, the maximum income would be $55,125.

Originally created in 1999 for drivers in Los Angeles and San Francisco,
the program has been available statewide since 2007. The low-cost auto
program has provided approximately 50,000 policies since the program´s
inception and covered about $8 million worth of injuries, property
damage and medical bills associated with accidents involving the
program´s policyholders. Annual premium rates vary by county, ranging
from $161 in Imperial County to $368 in Los Angeles County.

Consumer Watchdog
Consumer Watchdog
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