Rampant poverty and high unemployment were two of the factors that helped convince California Governor Arnold Schwarzenegger to sign AB 1597 into law. The measure will extend an existing program that helps low-income Californians deal with car insurance costs.
Consumer advocates hailed the passage of AB 1597 as a positive move that will help keep the less fortunate in the state from falling through the cracks of the down economy. “The low-cost auto insurance program is an example of 
government finding an innovative way to address a serious problem and doing it without stretching taxpayer dollars,” said the executive director of Consumer Watchdog, Douglas Heller. Heller’s group was one of the prime movers behind the original creation of the program in 1999.
The California Low Cost Auto Insurance program – which has provided car insurance to more than 50,000 Californians since its inception – would have expired this year, if not for AB 1597’s passage. The bill provides for five more years of the program without significantly burdening the state’s already-strapped taxpayers.
CLCA offers significantly lower car insurance rates than are generally available commercially, ranging from an annual payment of $161 in Imperial County to $368 for drivers in Los Angeles County. This is about half the usual rate for minimum coverage, according to Consumer Watchdog. The policies provide for $10,000 in bodily injury coverage per person, $20,000 per accident, and $3,000 in property damage. They are only available to low-income Californians with good driving records above the age of 19, with at least three years of driving experience and a car valued at less than $20,000.
Consumer Watchdog cites a 2008 study from the Insurance Research Council which found that almost 20 percent of Californians didn’t have auto insurance at the time.