SACRAMENTO– The math is daunting if you’re an average motorist in South-Central Los Angeles who must drive to work, like nearly everyone else in California’s car-dependent culture.
Your annual income is probably $ 8,110 and your car insurance premium for minimum coverage costs $ 1,882 a year, according to the state Insurance Department.
That’s one reason 80 percent of the drivers in that urban neighborhood are uninsured – despite a California law requiring motorists to carry insurance, the department says.
The Assembly this week begins looking at a trio of Senate-passed bills that attempt to link continuation of that insurance requirement, due to expire in January, with a new low-cost policy for low-income drivers.
“We require every driver to buy the insurance industry’s product, to buy insurance, and we have the police enforce it with stiff fines and sometimes car impoundment. But if you’re poor in California, you cannot afford insurance and you’re left between a rock and a hard place,” says Doug Heller of the Foundation for Taxpayer and Consumer Rights.
His Santa Monica-based consumer advocacy group backs a bill that would require insurance companies to offer a “lifeline” policy for motorists whose annual household income falls below 150 percent of the federal poverty level. Using the 1998 poverty level of $ 16,450 for a family of four, the income cutoff to qualify for such insurance would be $ 24,675.
The proposed policy would cost $ 300 a year for “very good” drivers with no violation points for an at-fault accident or ticket in three years and $ 400 a year for “good” drivers with only one violation point in three years.
That bill is sponsored by Sen. Martha Escutia, D-Commerce. A rival bill by Sen. Jackie Speier, D-Daly City, would establish a low-cost insurance policy run through the current California Automobile Assigned Risk Plan, which insures drivers rejected by insurance companies due to poor driving records.
Under Speier’s bill, motorists with incomes less than 200 percent of the federal poverty level would qualify. Her bill does not yet specify a premium amount. The Senate has hired an insurance expert to recommend one.
A separate Speier proposal would make permanent the law that requires motorists to have insurance and show proof when they register their cars. The original law, written by Speier in 1996 when she was an Assembly member, will expire Jan. 1.
The bill also would close a loophole that lets motorists submit proof of insurance when they register and cancel the policy a short time later. Speier’s proposal would require insurers to inform the Department of Motor Vehicles of policy cancellations. It would reduce the fine for driving without insurance from the current $ 1,350 to $ 500.
That bill would not take effect unless the Legislature also passes a low-cost auto insurance measure.
The Assembly Insurance Committee plans to hold a hearing on Speier’s mandatory-insurance bill Wednesday and consider the Speier and Escutia low-cost policy bills next week.
The proposals’ sponsors predict lawmakers will ultimately send the three bills to a conference committee to seek a compromise before the legislative session ends in September.
The committee chairman, Assemblyman Jack Scott, says he doesn’t know what will happen to the bills. “Everybody would like to see low-cost insurance, but we have to see what the consequences would be on other policies in the state,” says Scott, D-Altadena.
And there will be consequences, insist insurance industry lobbyists who oppose all three bills.
“People who live in rural areas and are good drivers are going to be subsidizing, through higher rates, good drivers who live in cities,” says Jerry Davies of Personal Insurance Federation, which represents companies that insure about half of the state’s cars.
His group backed another bill, by Assemblyman Dennis Cardoza, D-Atwater, that stalled in the same committee, but could be considered again next year. It would have lowered the minimum insurance levels required by law.