Navigating the complexities of auto insurance can be particularly challenging for low-income drivers, but California offers a solution through its California Low-Cost Auto Insurance program (CLCA). Established in 1999, this program was designed to provide affordable coverage for those who qualify and aims to ensure that all Californians have access to essential auto insurance. For those seeking low-income car insurance in CA, understanding the details of the California Low-Cost Auto Insurance program is essential. Bankrate can help you explore its benefits, eligibility criteria and the application process. Whether you are seeking low-cost auto insurance program reviews or simply want to understand how the CLCA program works, this comprehensive guide can help.
What is the California Low Cost Auto Insurance program?
Drivers who cannot afford car insurance in the private market might qualify for the California Low Cost Auto Insurance program. While the coverage offered is less substantial than a minimum coverage insurance policy purchased through a typical insurer, a policy through CLCA still satisfies the state’s financial responsibility laws.
Base CLCA policies provide liability-only coverage with the following policy limits:
- $10,000 of bodily injury or death liability per person
- $20,000 of bodily injury or death liability per accident
- $3,000 property damage liability per accident
Unlike a regular auto insurance policy, a CLCA policy is not very customizable. Comprehensive and collision coverage are not available through this program; drivers seeking these types of insurance would need to purchase them from a separate provider. However, CLCA policyholders may add the following coverages to their policies for an added cost of around $43 to $82 per year:
- $1,000 of medical payments coverage per person
- $10,000 of uninsured motorist bodily injury per person
- $20,000 of uninsured motorist bodily injury per accident
Who is eligible for low-income car insurance in CA?
The CLCA insurance program is not meant for those who are simply looking for cheap insurance in California. It is strictly for motorists whose income is below the federal poverty level and who need affordable auto insurance. Because this is not a regular insurance policy, eligibility restrictions apply and customers do not have much flexibility in terms of coverage. Also, only a few insurance companies are permitted to sell these policies, and customers cannot choose the provider.
To be eligible for the program, you must:
- Have a valid California driver’s license
- Own a vehicle worth no more than $25,000
- Be at least 16 years old (applicants under 18 must be legally emancipated)
- Meet income eligibility requirements
- Have a good driving record
The CLCA defines a “good driver” as someone who has held a license for three consecutive years, has no felonies or misdemeanors on their record and has earned no more than one point on their driving record in the past three years. A good driving record will also not have any at-fault accidents that resulted in injuries or death within the past three years.
Income eligibility requirements vary based on the size of your household. Per the CLCA website, these are:
- $37,650 or less per year for a one-person household
- $51,100 or less per year for a two-person household
- $64,550 or less per year for a three-person household
- $78,000 or less per year for a four-person household
- $91,450 or less per year for a five-person household
To prove income, you may provide a W-2 form, 1099 form, payroll stub, pension letter or another qualifying form. A full list of accepted documents can be found on the CLCA website.
There are also restrictions on how many vehicles you may insure through the California Low Cost Auto Insurance program. Only two vehicles and two policies are allowed per person, and the program does not extend to commercial vehicles or motorcycles. Additionally, all cars in the household must be insured under CLCA in order to qualify.
How to apply for CLCA
When applying for the CLCA insurance program, the process is different from buying other insurance policies. You don’t get to compare quotes or even choose the provider. To determine your eligibility, you need to either visit the CLCA website and fill out the questionnaire, or get in touch with a CLCA agent.
The process of enrollment is straightforward. All you have to do is click the “Apply Online” button on the website, choose to select an agent and submit the required information. In case of problems or disputes, applicants are advised to contact the California Department of Insurance helpline at 1-866-602-8861.
How much does the CLCA insurance program cost?
Expectedly, car insurance costs for the CLCA program are calculated differently than they are for private policies. Standard insurance companies determine the annual cost of a policy based on a number of factors, from the type of vehicle to the driver’s ZIP code. However, when enrolling for the CLCA insurance program, there is no comparison shopping like you might see when shopping for the best car insurance policies. Instead, there are set rates that range from $198 to $802 per year. Drivers on the program may pay all at once or put 20 percent down and pay the remainder in seven installments. However, each installment will incur a $4 transaction fee.
Because CLCA offers only basic liability coverage, each county within California has a different base price. Your base price could change depending on your age and driving experience. Drivers between the ages of 19 and 24 see a 30 percent surcharge on their base rates, while teen drivers between 16 and 18 pay double the base price. If you’re an adult driver who has held a license for less than three years, your policy will be 40 percent more expensive than your county’s base price.
There are two optional coverage types offered: medical payments and uninsured motorist protection. Medical payments coverage can help with you and your passengers’ hospital and other medical bills, while uninsured motorist coverage offers financial protection if you are hit by a driver without insurance. The prices for each are fixed and are added to the base cost of the policy.
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California counties and costs
Frequently asked questions
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How do I know if I’m eligible for California low-cost auto insurance?
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How does the California Low Cost Auto Insurance program work?
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How much is the low-cost auto insurance program in California?
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Can I purchase full coverage car insurance from CLCA?
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