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No Reason to be Uninsured in California: Low- to Moderate-Income State Insurance Plan

According to an article in the San Fernando Valley The Sun paper on May 31st, there are about four million drivers in California who are uninsured.

It’s a risky endeavor; not just for the uninsured driver, but for everyone around them. David Jones, California Insurance Commissioner states, “If you get caught, you can have your license suspended, your car impounded and face a heavy fine.” There is little doubt that those three penalties carry a much stiffer cost than a basic liability policy.

Since 1999, the California Low Cost Automobile Insurance Program (CLCA) has provided low cost liability protection for California drivers who meet eligibility guidelines. California has elected to decrease premiums this year, as much as 9%, and have also raised the income guidelines so that more people could be eligible.

A single person making $27,925 or less annual income is eligible for this program. $37,825 is the maximum for two people in the household, and a family of four can make as much as $57, 625 and still be eligible. By having more people eligible for the low cost auto insurance program, the hope is that it decreases the number of uninsured people on the road, making everyone safer.

To make matters even easier for eligible participants, CLCA offers five payment options that make it easier for budgeting purposes. If a participant can plan for it, paying the policy premium in full for the year will save them $4 each month for installment fees, saving them even more.

There is a catch, however. The state insurance plan only provides state minimum coverage, and also allows for an even lower coverage: $10,000 each person, $20,000 total for Bodily Injury (BI), and only $3,000 for damage to property (PD). This means that people who carry these lower amounts of protection have a much greater chance of having to pay out of pocket for additional injuries and damages they cause to someone else.

It is certainly preferable than being uninsured. However, Californians who opt into the CLCA should view it as a temporary alternative until they can insure with a standard company for more coverage.

With a good driving record, standard insurance with higher limits of $50,000 for both BI and PD might not be a great deal more than the CLCA policy that only provides $10,000 BI and $3,000 PD.

If you are driving around California without insurance because you don’t think you can afford it, contact the CLCA nearest you to find out if you are eligible.

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