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California Offers Low Cost Alternative to Auto Insurance PDF Print E-mail
Written by Alex Garcia Sun Contributing Writer   
Thursday, 31 May 2012 03:36

Average annual price in Los Angeles County is $347

In California, there's an estimated four million uninsured drivers.

"That's a risk for them and everybody else," said California Insurance Commissioner Dave Jones, who recently announced decreases of up to 9 percent, as well as increases to the income elegibility caps for the California Low Cost Automobile Insurance Program (CLCA), which provides cheaper auto policies to state drivers.

"For many of them (uninsured drivers), the impediment is the price. But driving without insurance is against the law," Jones said. "If you get caught, you can have your license suspended, your car impounded and face a heavy fine."


Approved by the legislature in 1999, CLCA provides liability- only auto insurance to low and moderate-income drivers.

Last year, 45,141 of these policies were issued to California drivers -- 2,709 of them in Los Angeles County.

Fernando Matias, a 52-yearold, father of two has benefited from the program for the past five years.

"I saw an ad about it and called and they told me I qualified," said Matias. "I don't have tickets or accidents, and my car is within the worth they ask for."

In 2007, Matias changed his regular $800-$900 auto insurance for a CLCA policy and says he saves about $500 a year.

"I would recommend it to a lot more people that can benefit from it," said Matias.

Changes to eligibilty

This year, the state decided to decrease policy premiums by up to 9 percent (depending on the county you live in) and increase income eligibility levels.

That means, the cost in Los Angeles County went from $358 to $347 (a 3 percent reduction), which comes out to about $27-$28.99 a month.

And to facilitate payment, there are five payment options, including paying the full annual premium, a $125 deposit with balance to be paid within 30 days, $100 deposit with balance to be paid in six bi-monthly installments, $125 deposit with balance to be paid in five bimonthly installments and a 15 percent deposit with balance to be paid in six bi-monthly installements ($4 installment fee for all of them, except the full payment option).

"If financial limitations have kept consumers from purchasing car insurance, these changes make low cost auto insurance a more viable option for uninsured drivers."

At the same time, income eligibility was raised to $27,925 for a single individual; $37,825 for a two-person household; $47,725 for three people and up to $57,625 for a family of four.

"We want all residents in California to have auto insurance. That way, they're covered and we're covered," said Jones. "It's important to have a lowcost alternative (to auto insurance)."

Other changes to the program this year include that those who qualify for the program will receive a temporary proof of insurance card upon soliciting it, eliminating the two week wait to get it in the mail. Also, people can pay for the policy with a credit or debit card.

Peter Meza of the California Department of Insurance, said all people have to do to obtain one of these policies is call or access their email where you will be prompted through a series of questions to see if you qualify. If you do, then you will be referred to specially trained and certified auto insurance processors near your home.

Being that these auto policies are somewhat cheaper than regular ones, they also come with lower coverage levels.

For example, California requires a minimum coverage of $15,000 and $30,000 for death and injury, and $5,000 for property damage.

CLCA policies offer a $10,000, $20,000 and $3,000 coverage, which means in case of an accident where you're at fault, you will have to shell more money out of your pocket to cover expenses.

Insurance Commissioner Jones admitted the state policies are not perfect, but he noted that "it's a lot better than not having anything at all."

To find out more about the program, call (866) 602-8861 or visit

Last Updated on Thursday, 31 May 2012 04:16