Understanding California State’s Low Cost Auto Insurance Program

Through this program, the State of California offers some highly affordable automobile liability insurance plans for income eligible drivers with good track record. In California, some licensed insurance carriers issue such low cost policies. In California, the low cost auto insurance plan in the state satisfies financial responsibility laws. The California Low Cost Automobile Insurance Program has been created by the legislators to reduce the number of uninsured drivers and offer low priced auto insurance policies for the poor. Launched in 2007, CLCA started state-wide sales in December 2007.
In California, the low cost automobile insurance program is offered by the California Department of Insurance and the California Automobile Assigned Risk Plan administers it.Drivers eligible for this program will need the following items to enroll including a valid driver license, current vehicle registration, the initial deposit amount for payment, income proof consisting of any one of the documents including a copy of applicant’s federal or state income tax return for the last year, a 1099 Form, a W-2 Form, a payroll stub, a Medi-Cal card, an employer verification letter, a Social Security or pension letter or a utility company Lifeline verification.
The program requires that the insurance carriers offer a reduced auto liability policy that costs not more than $350 a year in Los Angeles and $290 a year in San Francisco benefiting the motorists with good driving records. At the same time, the gross annual income level of the beneficiaries should be less than 250 percent of the federal poverty level. Approximately this will work out around $50,000 per year for a family of four.As of today’s regulations, California low cost auto insurance policies must provide not less than $15,000 per person towards bodily injury liability coverage and $30,000 per incident, while not less than $5,000 should be earmarked for property damage. As a way to reduce the premium rates, the government has permitted these policies to carry lower standard limits of $10,000, $20,000 and $3,000, respectively.
There are some other requirements for the drivers to be eligible for the award of this policy. The minimum age of eligibility for drivers to qualify for this program is 19. In addition, they should have been driving for not less than three consecutive years. It is mandatory that the insurance applicants do not have more than one property-damage-only insurance claim in situations where they were at fault or one point for a moving violation over the period of last three years. The car that is insured should not be worth more than $20,000. The insured driver should not be a college going student deemed as a dependent for federal or state income tax purposes. The driver must not have any other liability insurance policy in force for another vehicle. There is a 25 percent surcharge put in place for unmarried males between the ages of 19 and 24 since this segment of the population stands for the highest driving risk. 
Auto insurance rates in California are highly competitive. You may be surprised to know that there is also additional coverage beyond the purview of the reduced liability limits of the LCA program available through the private auto insurance market. Therefore do some research independently in the open insurance market or consult a genuine and unbiased auto insurance agent or broker to land on a policy that will best meet your typical requirements.