Governor Signs Extension for Low-Cost Auto Insurance Program

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Although the state-run program has helped tens of thousands of consumers, the auto insurance coverage plans secured through the program provide only minimal coverage. advises consumers to run cost comparisons and consider all available options before choosing this route.

California Gov. Arnold Schwarzenegger this week signed into law a bill that gives new life to a program that has helped tens of thousands of drivers in the state find auto insurance coverage within their means. The new law ensures that the program, which was set to expire in January 2011, will now continue until at least 2016. Whether the governor would extend the program was up in the air, as he vetoed a similar bill in 2009.

Originally launched in 2000, the California Low-Cost Automobile Insurance Program (CLCA) assists some consumers who have conducted a standard auto insurance comparison but still cannot find coverage that fits into their budgets. Eligible participants, though, must meet the following criteria: the person to be insured is 19 years old or older, has been continually licensed for at least three years, maintains a “good” driving record and has a household income that does not exceed 250 percent of the federal poverty level.


Those who do qualify for the program are afforded access to minimal coverage for minimal rates. Premium prices are set by county, with last year’s rates ranging from $161 to $368. According to the National Association of Insurance Commissioners, the average liability policy expenditure in the state in 2007 was estimated to be $465.

Although the policies offered through the program will satisfy the state requirement for motorists to carry coverage, they actually come with levels of protection that are below the state-required minimum levels of protection. The limits of a basic liability policy secured through the CLCA cannot exceed 10/20/3 (shorthand for $10,000 for bodily injury per person, $20,000 for bodily injury per accident and $3,000 for property damage per accident). The state requires normal policyholders, though, to carry at least 15/30/5.

Since its beginnings as a pilot program offered only to motorists in Los Angeles and San Francisco, the program has expanded to the entire state, with the department of insurance reporting a total of at least 50,000 policies being issued throughout the CLCA’s history.

Consumers who are thinking about enrolling such programs should understand the risk of having such low liability levels. Shoppers who are looking for a policy with higher coverage limits while maintaining a low price can visit where they can obtain a free quote comparison that includes prices from a variety of carriers.


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Benjamin Zitney
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