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Can’t afford to get auto insurance? You could get a deep discount if you live in California

By Justin Stoltzfus

For California residents who are having trouble paying their bills, it’s important to know about the California Low Cost Automobile Insurance Program (CLCA). The program, available in all the state’s municipalities since 2007, gives low-income residents a way to stay behind the wheel legally without breaking the bank for auto insurance.

For those who qualify, the CLCA offers low rates. According to the Insurance Information Institute, Californians paid an average of $450 a year for minimum liability California auto insurance. CLCA enrollees, however, can get rates of between $200 and $400 a year for each covered vehicle, depending on which county they live in, according to the California Insurance Department. This premium provides basic coverage of $10,000 for bodily injury claims per victim, $20,000 for bodily injury per accident and $3,000 for property damage. Additional uninsured motorist coverage and medical payments coverage are available at an extra cost.

However, because the program is meant to help low-income families, income limits do apply. A single driver, for example, can’t earn more than $27,075, and the maximum income for a family of four is $55,125. There’s also a maximum value of $20,000 for a car insured under CLCA, and applicants are not allowed to get auto insurance through conventional insurers, which would demonstrate that they don’t really need CLCA coverage.

In addition, those who want to get CLCA premium rates have to prove that they are good drivers. Eligible drivers cannot have had more than one at-fault accident in the past three years and must have no felony or misdemeanor charges for traffic violations, according to the California Insurance Department. An at-fault accident that involved bodily injury may disqualify a driver. There are a few other eligibility requirements, such as one limiting the inclusion of college-age dependents.

As of March 2011, same-sex couples may find it easier to apply for coverage. The California Insurance Department updated its CLCA applications to include the gender-neutral category of “spouse.”

The CLCA is designed to help low-income families buy car insurance to help bring down the state’s uninsured motorist rate. Uninsured drivers cost those who share the road with them thousands of dollars each year in the form of insufficient coverage for accident costs. Yet, according to the Insurance Research Council (IRC), a tough economy may encourage drivers to cut insurance from their budgets. IRC estimates that one in six drivers nationwide now hit the road without insurance. In California, roughly 18 percent of drivers uninsured, according to IRC.

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