California Automobile Assigned Risk Plan (CAARP)

California Automobile Assigned Risk Plan (CAARP)

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The California Automobile Assigned Risk Plan (CAARP) was created in 1947 by the state legislature to make sure that all drivers on the road are protected by auto insurance.

It can be used by CA motorists who have a hard time affording insurance coverage and by high-risk drivers who may not be able to find insurance on the regular market.

What is the California Automobile Assigned Risk Plan (CAARP)?

The California Automobile Assigned Risk Plan is the state's residual auto insurance market, which is also called the nonstandard market.

Consumers may use CAARP if:

  • They can't find an insurer in the regular market to give them a quote.
  • They can't access cheaper car insurance that better-rated drivers get.
  • They can't afford the standard market rates.

Through CAARP, these motorists are placed in a pool. Participating insurance companies — most licensed insurers in California — are required to accept a certain number of people from the pool, delegated by CAARP. The number of assigned drivers is in proportion to the market share each insurer has in California. For example, State Farm has approximately 15% of the market share in CA, so we would expect that it would cover about 15% of the CAARP pool.

There are two types of plans that are issued through CAARP. One of them is for income-eligible drivers through California's Low Cost Automobile Insurance Program (CLCA). The other type is for high-risk drivers with more than a few accidents or traffic tickets who are unable to get a policy through the voluntary auto insurance market.

Insurance plans through CAARP

Insurance policies through CAARP are not the same as those you would get in the voluntary market.

If you're looking for a low-cost policy, you may end up with one that provides less coverage than the state-required minimum. For high-risk drivers, your CAARP policy will likely be more expensive than the same policy through the regular market.

However, these trade-offs are better than the alternative: driving without insurance, which is a crime. If you're caught, you'll face a steep fine; you may have your vehicle impounded or lose your license, too.

California's Low Cost Auto Insurance Program (CLCA) policy

The California Department of Insurance created the CLCA in 1999 in an effort to provide affordable auto insurance for motorists facing specific financial constraints.

Drivers who have a good driving record and valid California driver's license but are unable to obtain auto insurance due to cost may be able to buy a more affordable policy through the CLCA. You also have to meet income, age and vehicle qualifications.

The CLCA will assign eligible drivers to insurers through the CAARP pool. A policy through the CLCA is the only occasion when an insurer may issue — and a driver may carry — a liability policy below the state-mandated coverage minimums. All CLCA liability policies have coverage limits of 10/20/3. You can also choose to pay more and get medical payments and uninsured motorist coverage.

High-risk auto insurance policy

When you are a high-risk driver, it can be difficult to get affordable car insurance, and sometimes you can't find an insurer willing to give you a policy at all.

By law, licensed auto insurance providers in California establish an approved driver class plan, by which all drivers are grouped into one of several classes by their profile and driving record. The higher the risk class an insurer assigns you to, the higher your insurance costs will be. If you fall under a class of higher-risk class than the insurer is willing to take, they will likely decline to insure you.

There are several factors that may cause insurance companies to consider a driver "high risk," such as having less than three years of driving experience, getting multiple speeding tickets, or being below the age of 25. However, there are non-standard insurance companies that specialize in insuring high-risk drivers, unless a DUI involving drugs or other legally severe offenses — such as a minor with a DUI record — are involved.

You may only apply for insurance through CAARP when you are unable to find a standard company to voluntarily insure you. Also, policies for high-risk drivers through CAARP are usually more expensive than the general market, even for the minimum amount of coverage.

Insurers in the pool have to offer at least the mandatory minimum limits, but it is up to the assigned insurer and the driver to reach an agreement on the coverage limits. However, insurance agents we’ve spoken to say that few companies are willing to provide limits higher than the state minimums to really high-risk drivers in California.

Each insurer is obligated to keep their CAARP-assigned high-risk drivers for three years. So if you are still a high-risk driver after three years — that is, you were unable to maintain a clean driving record in those three years or it wasn't enough time to bring your driving record down to a lower risk — then CAARP will assign you to a new insurance company if you aren't renewed.

Remember to practice safer and more conservative driving habits while insured through CAARP. Once you establish a record closer to a standard motorist’s, you might be able to access more competitive auto quotes in the regular market.

How to get insurance through CAARP

To enter CAARP as an income-eligible driver, you must first complete an online eligibility questionnaire through the CLCA's official website: https://www.mylowcostauto.com/.

To enter CAARP for a high-risk policy, you have to call the CAARP service number below. A representative will put you in contact with a local certified producer in your region, who is a CAARP specialist that acts as the mediator between you and the insurance company. Your certified producer will then connect you with an auto insurance company in California. You and your assigned certified producer will work with the insurance company's agent to get you an appropriate policy.

To find a CAARP-certified producer, call: (800) 622-0954.

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