California Low-Cost Insurance Program Lowers Premiums

The California Low Cost Automobile Insurance Program (CLCA) decreased annual premiums up to 9 percent across all state counties and increased income eligibility maximums, according to an announcement from state regulators.

The reduction, the biggest since 2009, puts the average statewide price of a CLCA policy at $257.69 annually, according to the announcement. The largest premium changes were mostly concentrated in counties located in Northern California: Alameda, Contra Costa, Marin, Sacramento, San Francisco, San Joaquin, San Mateo, Santa Clara, Stanislaus and Sutter.

The state-sponsored program gives low-income motorists who might otherwise go uninsured access to cheap auto insurance in California with liability-only policies.

To qualify, drivers must be at least 19 years old, have a “good driving record,” have been licensed for at least three years, be seeking to insure a vehicle worth no more than $20,000 and meet income requirements.

Income eligibility is currently based on maximum annual salaries of $27,925 for one person, $37,825 for two people and $57,625 for a family of four. Also, having a single male driver aged 19 to 24 years old adds a 25 percent surcharge to CLCA rates.

“These changes make [CLCA] a more viable option for uninsured drivers” who have been kept out of the market because of high premium prices, commissioner Dave Jones said in a statement.

Jones cited statistics showing that 15 percent of the state’s drivers lack the proper coverage. In their 2012 report to the state Legislature, CLCA officials said 59 percent of drivers enrolled in the program since it began more than a decade ago were previously uninsured.

Ten of the state’s 58 counties charge an average annual premium of $231, the lowest available in the program: Fresno, Kings, Madera, Merced, Monterey, Santa Barbara, San Benito, Santa Cruz, San Luis Obispo and Tulare.

In 2010, the state approved a five-year extension to the program, which had 9,791 active policies at the end of last year.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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