Low-Cost Auto Insurance: What You Need to Know About the CLCA Program
For low-income drivers, navigating the complexities of auto insurance can be particularly challenging, but the Low-Cost Auto Insurance Program (CLCA) offers a solution. The program was established in 1999 to provide affordable coverage to those who qualify and is designed to ensure that basic auto insurance is available to all. Understanding the details of the Low-Cost Auto Insurance Program is critical for those seeking low-income auto insurance.
What is a Low-Cost Auto Insurance Program?
Drivers who cannot afford private market auto insurance may qualify for a low-cost auto insurance program. While the coverage provided is not as good as the minimum coverage policy purchased through a regular insurance company, policies purchased through the CLCA still comply with the state's financial responsibility laws.
Who Qualifies for Low-Income Auto Insurance in California?
The CLCA insurance program is not for those who just want to buy cheap insurance on the go. The program is strictly for motorists with incomes below the federal poverty level who need affordable auto insurance. Since this is not a regular insurance policy, there are eligibility restrictions and customers do not have much flexibility in terms of coverage. Additionally, only a few insurance companies are allowed to sell these policies and customers cannot choose their provider.
The low-cost auto insurance plan also has limits on the number of vehicles you can insure. You can only insure two vehicles and two policies per person, and the plan is not available for commercial vehicles or motorcycles. In addition, all cars in a household must be insured under the CLCA to qualify.
How to Apply for CLCA
The process for applying for a CLCA insurance plan is different from buying other insurance policies. You don't have to compare quotes or even choose a provider. To determine if you qualify, you need to visit the CLCA website and fill out a questionnaire, or contact a CLCA agent.
The enrollment process is very simple. You just click the "Apply Online" button on the website, choose an agent and submit the required information. In the event of questions or disputes, applicants are advised to call the California Department of Insurance hotline.
How Much Does a CLCA Insurance Plan Cost?
As expected, the cost of auto insurance for a CLCA plan is calculated differently than for private insurance. Standard insurance companies determine the annual cost of a policy based on a range of factors, from the type of vehicle to the driver's zip code. However, when signing up for a CLCA insurance plan, you won't be doing comparison shopping like you would when shopping for the best auto insurance policy. Instead, rates are fixed at $198 to $802 per year. Drivers on the plan can pay it all at once or pay a 20% down payment and then pay the remaining amount in seven installments. However, a $4 transaction fee will be charged for each installment.
Because CLCA only provides basic liability coverage, premiums vary from county to county. Your premium may vary based on your age and driving experience. Drivers between the ages of 19 and 24 pay 30% on top of the base rate, while teen drivers between the ages of 16 and 18 pay twice the base rate. If you are an adult driver who has held a license for less than three years, your premium will be 40% higher than the base rate in your county.
Average Car Insurance Rates by Age
Because CLCA only provides basic liability coverage, premiums vary in each county. Your premium may vary based on your age and driving experience. The table below shows the average monthly and annual costs of a fully covered auto insurance policy based on age. Each age profile combines data for male and female drivers. Additionally, these profiles are based on drivers with a good driving record and a good credit score. The 16-year-old rates are for drivers with their own policies. Teens on family plans will receive cheaper rates than these.
What kind of coverage to choose?
There are two optional types of coverage: medical payments coverage and uninsured motorist coverage. Medical payments coverage helps pay for hospital and other medical expenses for you and your passengers, while uninsured motorist coverage provides financial protection if you are hit by an uninsured driver. The price of each coverage is fixed and added to the base cost of the policy.