Cal State Low Cost Auto Insurance Sees 18.9% More Participants in ‘09


Participation in the California Low Cost Automobile Insurance Program (CLCA) in 2009 increased by about 19% compared to 2008.

Cal State Low Cost Auto Insurance Sees 18.9% More Participants in ‘09Steve Poizner, California Insurance Commissioner, said that the 18.9% increase was due to the efforts of the commission’s outreach program as well as the dire economic situation in the country. The program, established in 1999, has been offered to every county in California since 2007.

The Commissioner explained that the law requires every single driver in the state to carry automobile liability insurance. However, he admits that the dire economic situation at the current time causes citizens to cut costs. The increase in the participation of the Low Cost Auto Insurance program shows that people are making smart choices in avoiding financial risk in the event of a road mishap.

Poizner encourages all state residents who fulfill the minimum eligibility criteria, and even those contemplating about shifting to another insurer, to avail of the program. Policyholders will be legally insured and can pay as little as 15% down payment and subsequent installment payments at low rates.

In 2009, the commission approved 6,306 applications out of 7,500 to the CLCA, with an average of 624 applications per month. April 2009 reported the highest activity since 727 applications were filed. It was during this month that Poizner embarked on a statewide tour to aggressively promote the program.

The CLCA aims to give state drivers a change to avail of low cost auto liability insurance, especially to car owners with good driving records who are in financial need. In the program, the rates are determined and adjusted per year in each county in the state for providing sufficient coverage for expenses and losses by means of the premiums collected.

Meanwhile, the California Department of Insurance (CDI) urges drivers to enroll themselves in the program because it is relatively easy to qualify.

To enroll, the CLCA has the following eligibility requirements: (1) the applicant should be at least 19 years of age, had possessed a driver’s license for three years and should have a good driving record – with not more than one accident dealing with at-fault property damage, or has had at most one moving violation sometime in the last three years; (2) should have no at-fault accident in the last three years which involved bodily injury (or death), and having no criminal record (felony or misdemeanor conviction) for violating the Vehicle Code; (3) the family meets maximum eligibility limits of $27,075 (for a single person), $36, 425 (for two persons), and $55, 125 (for a family with four persons) with a corresponding increase in limits proportionate to family size; and (4) the valuation of the vehicle insured should not exceed $20,000.