Drive for Car Insurance

From Inside Bay Area

Starting April 1, low-income drivers in Alameda County will be able to get auto insurance for under $350 a year as part of a move to expand an existing program to get more drivers insured in California.
The program is also expected to be expanded by mid-summer to San Mateo, Contra Costa, San Joaquin, Santa Clara, Sacramento, Stanislaus, Imperial and Kern counties. While rates have not yet been set for those other locations, Insurance Commissioner John Garamendi said Wednesday he expects they will be priced at under $400.

A state law opened the door for the low-cost auto insurance program to be started in San Francisco and Los Angeles counties in 2000. Rates in San Francisco — where it's estimated 19 percent of drivers are uninsured — are $314.

An estimated 23,000 uninsured motorists have signed up for the program in those two counties, with the vast majority signing up in Los Angeles.

The passage of SB 20 last year has allowed for the program to be expanded to 14 other counties where there are high numbers of uninsured motorists and high levels of poverty.

The idea is to provide low-income motorists with a limited liability policy for under $400 a year in hopes of increasing the number of insured motorists in California.

The state has more than 3 million uninsured motorists. The percentage of uninsured motorists is 12 percent in Alameda County, 7 percent in Contra Costa County, 12 percent in San Joaquin County and 16 percent in San Mateo County.

Under the program, motorists are provided with insurance that gives them limited liability coverage forfrom Business 1


personal injury to others and property damages resulting from an accident. The program allows motorists to add uninsured motorist coverage for an additional $30.

"There are 121,000 uninsured drivers in Alameda County. That's a huge population that's not buying auto insurance," Garamendi said. "We know the primary reason that people don't buy it is that they can't afford insurance.
"This will bring more uninsured drivers into the insurance market," Garamendi said. "Also, if we get enough people to get insurance, the cost of (uninsured motorist insurance) should go down."

To be eligible for low-cost auto insurance, a motorist must have a yearly income of no more than $23,275 for a individual, or $47,125 for a family of four, and a good driving record. The value of the insured vehicle cannot exceed $20,000. Motorists who meet the income criteria and already have insurance can sign up, said Garamendi, who publicized the program at a meeting Wednesday in Oakland.

"It's a crucial piece in solving the uninsured motorist problem," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights. "That's a benefit not just to those who are squeezed out of the system but to everybody on the road."

Heller cited a report that found that 83 percent of motorists who signed up last year for low-cost auto insurance were previously uninsured. The Personal Insurance Federation of California supported SB 20 after it was amended to allow for Garamendi to establish premiums for low-cost auto insurance on a county-by-county basis.