Auto Insurance Basics

California Low Cost Auto Insurance Program

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California established the Low Cost Automobile Insurance Program (CLCA) in 1999 to provide affordable insurance to income-eligible and good drivers who would otherwise be uninsured. CLCA policies have lower coverage limits than the minimums required by the state and cost less than standard policies. It has very restrictive eligibility requirements, and is not meant for consumers who are just looking for lower rates. Furthermore, the CLCA Program is actually not auto insurance sold by California's Department of Insurance, but a program that assigns a licensed auto insurance company to provide you a policy through the California Automobile Assigned Risk Plan.

CLCA Coverage Limits

Coverage limits provided by the CLCA are actually lower than California's minimum requirements, but policies still satisfy financial responsibility here. Limits are about $5,000 lower per person for bodily injury compared to standard policies, and don't provide the option for physical damage (collision & comprehensive coverage). The basic policy and optional coverages as followed:

  • Bodily Injury: up to $10,000 per person / $20,000 per claim in an accident that you caused and are determined to be at fault for. This pays for the medical care and a few other expenses for the drivers and passengerse in the other car
  • Property Damage: up to $3,000 per accident for damage to other people's property
  • Uninsured Motorist Bodily Injury: optional coverage for up any injuries you caused to the other car: up to $10,000 per person / $20,000 per accident. This may be worthwhile to consider, given that nearly 15% of auto insurance claims in California involve an uninsured driver.
  • Medical Payments: optional coverage paying for medical care for you that are medically necessary: up to $1,000 per person

Eligibility Requirements

Requirements for the CLCA program are restrictive and very specific. There are income requirements, household requirements, and other miscellaneous criteria in order to be eligible. Once you qualify, however, your entire household and the cars it drives come under the program. You're limited to a max of 2 cars per person, and 2 policies per person.

  • License: Have a valid California driver’s license, or an AB60 license regardless of immigration status
  • Age: Be at least 19 years of age, and not listed as a dependent by your family
  • Income: Your household's annual income must be below 250% of the federal poverty level. Your household is defined as the unit of people listed on your federal or state income tax form. A family of four, for example, has to make less than $60,625 in order to be eligible. Proof of income will be required.
  • Vehicle: The vehicle cannot be worth more than $25,000, and ALL cars in the household must be insured under CLCA.
  • Driving record: No more than 1 at-fault accident, without injury or death, in the past 3 years, and no more than 1 point from moving violations

To meet the income requirements for the CLCA program, your household's annual income must be lower than 250% of the federal poverty level (FPL) for that size. The table below shows income eligibility for a household of up to 8 people. For each additional person after 6, add $4,160 to the FPL and multiply the total number by 2.5x to determine the ceiling.

# People in Household 2015 Federal Poverty Level Highest Eligible Income for CLCA
1 $11,770 $29,425
2 15,930 39,825
3 20,090 50,225
4 24,250 60,625
5 28,410 71,025
6 32,570 81,425

Costs of CLCA Policies

Typically, auto insurance companies calculate rates based on their own proprietary models and experience with different drivers, vehicle types, and policy limits. The CLCA helps to ensure low costs across the state overall, by establishing base rates by county. You do not get to pick your auto insurance company like a typical consumer shopping for the best auto insurance quotes

Basic Policy Costs of the basic CLCA policies with only liability coverage are generally fixed, but there are two factors that can raise the costs of your policy. If you're a single male driver between the ages of 19 – 24 years old, your rates are typically 25% higher than the base rate. If you're a driver with less than 3 years of verifiable driving history, then you get a 30% surcharge.

Optional Coverage The available optional coverages – Medical Payments and Uninsured Motorists BI – on the other hand are fixed amounts that vary by the driver’s resident county. They're not affected by the surcharge, and just get added to your total premium cost.

To calculate how much a policy under the CLCA will cost you, locate your county's base rate, and then add on the cost of any optional coverage to calculate your annual premium. The maximum amount of surcharge that can be applied to each policy is 30%. If there is a single 19 year-old male driver with 2 years of driving experience living in San Diego County, his base rate will be $281 a year, and no higher. We've provided a sample below of annual costs in the five largest California counties.

Annual Costs of CLCA Policy by Top 5 Largest CA Counties

County Base Rate Base + 25% Base + 30% Med Pay UM
Los Angeles $363 $454 $472 $36 $68
San Diego 225 281 293 20 36
Santa Clara 261 326 339 27 36
San Francisco 261 326 339 27 36
Fresno 213 266 277 23 33

How to Enroll in the CLCA

The enrollment process for the CLCA is different from that of getting regular auto insurance - you don't get quotes, and you don't get to pick your insurer. You first have to determine your eligibility for the program through an online questionnaire or a CLCA agent.

  1. Fill out the online CLCA eligibility questionnaire, and press continue; or contact CLCA Customer Service at 1 (866) 602 – 8861
  2. Choose "Yes Apply Now", and "I want to select an agent"
  3. Select an agent, and press continue
  4. Fill out the contact information fields (at least email and phone), and submit

Although applicants of auto insurance through the CLCA program do not get to choose their insurer, the California Department of Insurance is aware that there may be issues involved in interactions with insures. For drivers who find that there are disputes on issues such as claims, policy handling, etc., they may call the California insurance help hotline at 1 (800) 927 - 4357.

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