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California Law Eases Access to Low-Cost Car Insurance Quotes Scheme

California Governor Jerry Brown recently signed into law a bill authorizing low-income residents with good driving records to get their car insurance quotes through the state’s Low-Cost Auto Insurance Program online.

The program generally costs $250 to $360 per year for a policy, and provides basic coverage. In the past, many drivers were unaware of the program, or had difficulty taking advantage of it due to the need to find an agent certified to sell the policy and process the paperwork in order to join the program.

Insuring the Uninsured

The program now serves more than 60,000 Californians, most of whom did not previously have coverage and were driving uninsured with their excuses for not hunting for car insurance quotes varying from lack of money to forgetfulness. Policies provide coverage of $10,000 per person for bodily injuries and $20,000 per accident, with $3,000 for property damage. This meets state minimum coverage requirements.

“At a time when the economy has hit so many Californians so hard, an easily accessible low-cost insurance policy could make the difference for people desperately trying to avoid driving uninsured or having to give up their cars altogether,” said Consumer Watchdog executive director Doug Heller.

The organization supported the bill as a means of improving access to the program. Drivers are eligible depending on their income, driving record, age, driving experience and the value of their car, which must be worth less than $20,000. Many of those who are eligible have not participated in the program, which may change. The program is estimated to have provided coverage in more than 3,000 accidents which would otherwise have lacked coverage.

About the Law

According to Heller, the effectiveness of California laws requiring auto insurance coverage has been hampered in the past by the difficulty of securing such coverage, particularly for the demographic this program targets. While it serves only those with good driving records, the program has still reached a large number of drivers despite the communications problems the new law is intended to resolve.

The program is self-sustaining, unsubsidized by any outside source. It does not receive funding from other drivers’ insurance payments, and is not supported by external government funding. If the new law is as effective as advocates hope, the program may become a model for similar initiatives in other states, which could significantly increase the availability of insurance coverage nationwide.