How Does the California Low Cost Automobile Insurance Program Work?

Republic of CaliforniaThe California Low Cost Automobile Insurance Program (CLCA) was designed to help Californians that are considered good drivers and can demonstrate financial need with the ability to obtain liability coverage at an affordable rate. In order to gain assistance from the program, motorists will need to complete a questionnaire test provided by the Department of Insurance (DOI) to see if they may qualify. In the event that the applicant is eligible to receive a policy through the CLCA, the DOI will provide a list of certified producers to assist with the process of obtaining an automobile policy through the program.

Motorists who meet the eligibility requirements and complete the application process with the assistance of a qualified producer will be assigned to a licensed and admitted California auto insurance company through a random assignment process. Consumers are unable to choose an insurer and are assigned by the state to a carrier. This is to ensure that each company receives a "fair share" of applicants.

Californians that utilize the low cost auto insurance program should note that the coverage provided is the absolute minimum allowed by law. The liability limits that are provided by a CLCA policy are as follows:
  • $10,000 for bodily injury to one person
  • $20,000 for bodily injury per accident
  • $3,000 for property damage
The program allows motorists to purchase optional car insurance coverage at an additional cost. For an added charge drivers may purchase:
  • $1,000 for medical payments per person
  • $10,000 for uninsured motorist bodily injury per person
  • $20,000 for uninsured motorist bodily injury per accident
The auto insurance policies issued through the CLCA do not provide coverage against physical damage sustained by the insured vehicle, which is also referred to as Comprehensive and Collision. However, this addition may be available separately through the producer of the policy and may be purchased at an additional premium.

CLCA Eligibility Requirements

The program is only available to CA residents that can demonstrate the financial need of assistance to obtain and continue coverage. Additionally, applicants must meet age requirements and qualify as a good driver as described by the state. An applicant must be at least 19 years old and have been continuously licensed for the past three years and the value of the vehicle to be insured must be less than $20,000.

To qualify as a good driver the applicant cannot have more than one at-fault property damage only accident or have accumulated more than one point for a moving violation in the past three years. Applicants must not have a felony or misdemeanor conviction for a violation of the Vehicle Code on their vehicle record.

The income eligibility requirement for the program is based on the household size and total income as follows:
  • 1 Person - $27,075
  • 2 People - $36,425
  • 3 People - $45,775
  • 4 People - $55,125
  • 5 People - $64,475
  • 6 People - $73,825
  • 7 People - $83,175
  • 8 People - $92,525
Silhouette of CaliforniaThe state encourages the usage of the program to those who qualify rather than operating a motor vehicle while uninsured. For more information, eligibility requirements and to apply for assistance from the CLCA, residents can contact the California Department of Insurance for further assistance.