UPDATED: Jul 14, 2011
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In the State of California it is estimated that over 4 million drivers are uninsured, which puts everyone in the state at an elevated risk of having an accident with someone who has no car insurance coverage. Many of these drivers are unaware that California offers an affordable insurance coverage plan for those who qualify.
A low cost, no frills auto policy is available from the state, but very few people who qualify take advantage of it. Many experts believe that most of these people do not even know it is in existence, so California is launching a new ad campaign targeted at these uninsured motorists.
In order to qualify for the low cost auto insurance you must be at least 19 years of age and have 3 years or more driving experience under your belt. Your car must be valued under $20k and you and your family must be below a certain income level. A typical family making under $50,000 would be an example of one that may qualify. The policies are issued by the CDI and there hope is to reduce the number of uninsured on the road.
The problem lies in car accidents that involve an uninsured motorist because the other party will be responsible for their own repairs if they cannot get the money from the at-fault party. Since many uninsured do not have insurance because of the cost, it can be very difficult to get reimbursed for a loss. The liability will then often be placed with the insured person’s insurance, which then drives up the cost of auto coverage for everyone.
An individual can purchase the insurance from many different participating agents, and currently there are only about 10,000 people enrolled in the coverage. Estimates put the numbers at 100’s of thousands of California residents that either qualify and do not have insurance or are paying more for a normal insurance policy.
The plan costs $400 a year and carries 10/20/3 coverage, which many believe is very low liability maximums. However, compared to the alternative of having no insurance, this plan is clearly better for all involved. It is important to review your particular situation when deciding what and how to buy car insurance.
Later in 2011, the California Department of Insurance is planning to launch a statewide campaign to educate those who may be eligible but are either not taking of advantage of it or are unaware the program exists. The plan is to cover billboards statewide in addition to other traditional forms of advertising like TV and radio.
For more information or to download an application, you can visit the California Department of Insurance website.