California Commissioner Delivers Holiday Gift for State’s Motorists

December 9, 2005

Delivering an early holiday gift to California drivers, Insurance Commissioner John Garamendi on Thursday announced significant new changes to the California Low Cost Automobile Insurance program (CLCA), making it easier for qualified good drivers to get a policy.

Standing in an official LAPD impound lot, where many uninsured autos end up, the Commissioner detailed the effect of new legislation authored by Sen. Martha Escutia, D-Whittier, and sponsored by the Commissioner. Simply put, it will help reduce the glut of uninsured autos on California’s roadways. In Los Angeles County alone during the year 2000 there were an estimated 1,356,239 uninsured automobiles – or 23.5% of all autos – operating on county roads.

“Every day more than a million uninsured drivers hit the roads in California,” said Garamendi. “Unfortunately, they sometimes hit other cars and cause serious financial consequences. The new changes to the CLCA program will help protect us all by reducing the number of uninsured drivers on our roadways.”

The CLCA program can provide low-income good drivers with state-approved auto insurance for less than $400 per year in Los Angeles. Since its inception the program has issued 22,665 policies. While California law mandates all drivers be insured, too many low-income motorists remain uninsured. The CLCA policy is a private insurance policy administered by the California Automobile Assigned Risk Plan and is not subsidized or otherwise supported by government funding.

The new legislation, which goes into effect Jan. 1, 2006, includes the following changes:

• Raises the eligibility cap on the value of an applicant’s vehicle from
$12,000 to $20,000
• Permits up to two low cost auto policies per person
• Effective April 1, 2006, expands the program into six new counties:
Orange, Riverside, San Bernardino, San Diego, Fresno, and Alameda

“There are too many people in California who drive illegally because they think they can’t afford insurance,” said Garamendi. “So now that it is easier to get insured, I want to ask one simple question: Why risk driving without insurance when you CAN afford it?”

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