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Extending CA Low Cost Auto Insurance

Extending California's low cost auto insurance program is a top priority for many policy makers across the state. The program has allowed thousands of state motorists to benefit by giving them lower priced policies for anything from commercial to off road vehicle insurance than they could otherwise get into under normal state laws mandating liability coverage minimums. But Gov. Arnold Schwarzenegger has so far failed to sign an extension of a bill to extend the program into law. The race is on as time winds down before the current program expires in the state of CA.

Lawmakers Urge Signing of AB1597

Final approval for the extension was given by lawmakers in California in August, but AB1597 still waits for the signature of the governor to pass into law. The Low Cost Auto Insurance Program offers low income motorists in the state of California the opportunity to buy bare bones liability coverage for their vehicles at no cost to taxpayers. The thought among proponents of the program is that it increases the likelihood of low income drivers choosing to get insured rather than drive without car insurance as millions of Californians do. The state has one of the highest uninsured motorist rates in the nation, and the Low Cost Auto Insurance Program was originally designed as a way to combat this problem. It offers affordable coverage for those who might otherwise not get insured because of economic reasons. But the governor's camp has maintained that the program so far has had no discernable effect on overall uninsured rates.

Low Cost Program Benefits Drivers

Those who are in favor of extending the Low Cost Auto Insurance Program in the state of California point to the thousands of motorists who take advantage of the chance to buy policies with reduced liability requirements every year. They say that most of these drivers would probably not get insured at all if the program was not available. To this group of proponents, every insured driver on the rolls is evidence of the program's importance. And best of all, they point out that the program does not cost the state of California any money. The Low Cost program has the support of powerful consumer groups as well as the bipartisan backing of the California legislature, so it would seem to be a natural fit for passage. But the road to extending the program has been all but smooth, with the governor refusing to sign an extension into law, effectively vetoing the legislation.

Details on Low Cost Program

The Low Cost Auto Insurance Program offers consumers policies at less than $400 per year, with exact costs varying by county. Proponents say that it is a great way to help consumers who are struggling economically to deal with their obligation to insure their vehicles and still save some money. They say that it also keeps roads safer for all drivers with fewer uninsured motorists sharing the roadways with everyone else. The program has another unique feature that is written into the extension awaiting the signature of the state governor. It requires that all claims paid out be covered by premiums charged to policy holders, meaning that it is completely self sufficient. Not only does the Low Cost program not cost the state anything, it also does not cost insurance companies or other motorists anything on their policy expenses.

The Low Cost Auto Insurance Program has been in use in the state of California since 1999 and is sponsored by the Department of Insurance, which oversees program administration. Those who are critical of the program point out that administering the program does take up government officials' time and other official resources. And critics look at overall enrollment numbers and say that they are miniscule in comparison with overall uninsured numbers. There are millions of cars on state roads that do not have current auto adult or teen car insurance coverage. The numbers are so large that punitive measures such as towing and impounding uninsured vehicles are impractical because there would not be nearly enough room to put all of these cars if such measures were enacted.

Uninsured motorists are a major cause of concern for many people in California. In June of 2010, voters turned down Proposition 17, a measure that would have punished drivers for coverage lapses. That vote was a close one and both sides of the debate were passionate in their arguments leading up to the election. Clearly the issue of uninsured motorists in CA deserves serious attention, and the Low Cost Auto Insurance Program is one way to try to address the problem and give motorists a viable option for getting off the rolls of the uninsured. Extending CA low cost auto insurance is a high priority for many lawmakers and consumer advocates across the state as a way to help state drivers.

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