California Takes Low-Income Insurance Program Online

Low-income Californians could soon find it easier to get auto insurance through a state program that offers low-cost coverage, thanks to a new law that will allow them to buy policies online.

Legislation signed last week by Gov. Jerry Brown authorizes certified agents and brokers to sell coverage under the California Low-Cost Auto Insurance Program (CLCA) through either an agent-referral website to be set up by state officials or other state-approved sites. Until now, applicants have had to find agents who are qualified to sell CLCA policies and fill out paperwork with them to enroll in the program, which was introduced more than a decade ago to help low-income residents meet the state’s legal requirement that all motorists carry California auto insurance coverage.

“This new law will make it significantly easier for qualifying good drivers to buy California’s unique low-cost policy and comply with state insurance laws,” Doug Heller, executive director of the Santa Monica-based nonprofit Consumer Watchdog, said in a statement.

Low cost auto insurance requirementsThe legislation calls for state regulators and officials with the California Automobile Assigned Risk Plan, which runs the low-cost program, to establish a website for receiving and assigning policies to agents and brokers and to develop a plan and set rules for selling policies through that dedicated website and other authorized sites.

According to an annual report on CLCA issued earlier this year by state regulators, about 60,000 Californians have bought policies through the program since it began in 2000. Two-thirds of those motorists were previously uninsured, according to the report.

The CLCA offers coverage to qualified motorists at rates ranging from $248 to $358 per year—less than half the statewide average cost—according to state regulators.

To qualify, applicants must be at least 19, have a minimum three years driving experience and no more than one point on their driving records. They must also meet income requirements that limit household income to no more than 250 percent of the federal poverty level, which varies annually and according to family size.

The basic plan provides $10,000 per person for injuries caused by the policyholder and a total of $20,000 per accident, plus $3,000 for damages caused by the policyholder in an accident. These coverage levels are often abbreviated as 10/20/3. Those levels are actually below the 15/30/5 minimum coverages that all other policies in the state must provide.

For additional fees, a motorist can get medical and uninsured motorist coverage.

The new law calls on CAARP to provide a listing of the 2,200 agents and brokers statewide who are authorized to sell CLCA coverage. Applicants are to be referred to an agent or broker located close to them.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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