California law requires that all drivers be insured. This law makes sense and seeks to hold people financially responsible for their actions no matter what the circumstances be it distracted driving, a DUI, or other type of car accident that may occur while operating a motor vehicle. For many however, the cost of insurance is too high to maintain and many low-income drivers simply go without to the detriment of everyone. Assemblyman Dave Jones’ bill, which was set to expire, was signed by Schwarzenegger on September 28, 2010 extending the bill for another five years. The first of its kind in the nation, the bill offers low cost basic insurance to qualifying, low-income drivers with good records.
Low-Cost Auto Program
The California Low Cost-Auto Program is a result of a 1999 law, SB 171, which was developed and sponsored by Consumer Watchdog. Under SB 171, all insurers in the state of California are required to sell a certain number of low-cost policies to qualifying drivers. Insurance companies and agents are required by law to inform prospective policyholders about the program. With poverty levels rising this program is more important than ever and insurance companies and agents must be held accountable to inform the public.
There are some requirements to qualify for the Low-Cost Auto Insurance Program. In order to be eligible for insurance under the program you must meet the low income requirements, have no more than one point on your record, have not had an at-fault accident involving death or serious injury in three years, be at least 19 years old, have held a valid license for the past three years, and have a vehicle with a value less than $20,000. To find out if you qualify, contact a qualified insurer in order to apply.
Many people are eligible for the program so it is now important to get the information out there to consumers. Some eligible policyholders are not being told about the program by the insurance companies and agents. “As a result, there are thousands of eligible motorists driving around without insurance when they could be covered” says Doug Heller, executive director of Consumer Watchdog. Heller is working with the community and government to raise awareness about the program and its benefits.
Benefits to the Sate
Uninsured drivers cost the state of California over $1.4 billion a year in insurance and accident premiums. The Low-Cost Auto Program will allow thousands the coverage that will benefit everyone on the road at a price that is affordable for the driver.
The program is administered by California Automobile Assigned Risk Plan (CAARP) and doesn’t cost the taxpayer anything. It is available in California at less than $400 a year, per person. The program has already insured more than 50,000 motorists with basic coverage and will succeed in insuring more in the years to come. The goal is to provide auto insurance for low-income drivers in California in an affordable and maintainable manner. Low cost auto programs are good for everyone since it means less people will drive uninsured.
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