Reports That Agents Have Snubbed Consumers Alarms Advocates
After receiving 3,300 inquiries, 102 low-income drivers purchased the new “Lifeline” low cost auto insurance in the first two weeks of its availability, according to data released by the California Automobile Assigned Risk Plan (CAARP), the state agency that administers the Lifeline program. It is expected that many of 3,300 callers will sign up in coming days. Advocates consider this an initial success, particularly because the vast majority of drivers who purchased the insurance were driving without insurance prior to the availability of Lifeline on July 1. However, reports that some low-income motorists’ efforts to buy insurance have been foiled by agents who refuse to sell the policy concern advocates.
“The initial response indicates that low-income drivers want the insurance, but one of the key questions is whether or not their insurance agent will sell it to them,” said Douglas Heller, consumer advocate of the Foundation for Taxpayer and Consumer Rights (FTCR). “Agents pushed for and received from the Legislature certain protections when they sell the policy, now they must fulfill their part of the deal and serve low-income consumers. The Department of Insurance must make sure that agents are not turning poor people away.”
CAARP staff has reported that many low-income consumers were rebuffed by insurance agents when they asked about the new low cost program. Advocates are asking consumers to report any agents who refuse to sell the Lifeline policy . Consumers who are snubbed by an agent should report it to FTCR at 310-392-0522.
Data Shows That Most New Policyholders Were Uninsured Before Buying Lifeline
According to the data made available by CAARP only one driver reported having auto insurance immediately prior to buying the lifeline policy; the rest were uninsured. That statistic is notable, because it responds to a concern of the insurance industry: that the only people to buy Lifeline would be insured drivers in search of cheaper rates. In fact, it is the uninsured who have taken advantage of this program.
Of the new policyholders for whom full data is available, the average Lifeline policyholder has a household income of $10,205 per year and 2.1 household members. The average policyholder is 47 years old. 97% of the policyholders live in Los Angeles County (and the vast majority within the Los Angeles city limits). The Lifeline policy is only available to low-income, good drivers in Los Angeles and San Francisco counties.
Consumers who want to learn more about the Lifeline policy should call the Low-Cost Auto Insurance Hotline at 1-800-622-0954