Governor Signs Lara Bill to Enhance Low Cost Auto Insurance Program
SACRAMENTO, CA — Today Governor Jerry Brown announced that he signed into law SB 1273, authored by Senator Ricardo Lara (D-Huntington Park/Long Beach), which would reform and enhance California’s Low Cost Auto Insurance Program by updating eligibility requirements and removing its sunset provision to help low-income Californians access affordable auto insurance options.
“Of the roughly 25 million vehicles on California roads, an estimated three million remain without auto insurance coverage due to the high costs of standard insurance premiums,” said Senator Ricardo Lara. “The Governor’s signature today will expand this program and ensure that affordable auto insurance options remain accessible for many low-income Californians, including those who may newly qualify as a result of AB 60.”
SB 1273 will reform California’s Low Cost Auto Insurance program by updating eligibility requirements that restrict many eligible drivers from having access to affordable auto insurance. It will eliminate the sunset provision which is set to expire in 2016 thereby extending operation of the program, and delete the limits on the value of an automobile that can be insured through the program. Currently, a vehicle valued above $20,000 cannot be insured through the program – excluding Californians who are just over the threshold but still have low annual incomes.
Additionally, the bill will expand the surcharge and eligibility requirement to include drivers who have not been continually licensed for the past three years and would include newly licensed individuals eligible under AB 60.
“This bipartisan bill was the single most important action that the Legislature took this year to reduce the estimated three million uninsured vehicles on California’s roadways,” said Commissioner Dave Jones. “The signing of this bill will allow a substantial number of individuals to be eligible for a low-cost insurance option that would otherwise be unavailable. By reducing the number of uninsured drivers, this law will help protect all California motorists.”
California’s Low Cost Auto Insurance was established by the Legislature in 1999 and is designed to provide income eligible persons with liability insurance protection at affordable rates in order to meet California’s financial responsibility laws. This program has zero cost to insurers and places no burden on other drivers. Currently, the California Low Cost Auto Insurance program offers eligible individuals in Los Angeles annual premiums of $380 per year, well below the cost of other comparable provider premiums.