low-cost-auto-insurance

Sometimes You Can’t Even Give Cheap Auto Insurance Away

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When it comes to California, they are usually the first state to step out on a limb and try something that no one else is doing.  And as such, the legislators in the State of California have built a reputation for being a bit unconventional at times.

This unique attribute has come to light recently with California’s attempt at decreasing the percentage of un-insured drivers that are on the roads.  Basically, California legislators decided they have found a way to decrease the number of uninsured motorist, make the highways safer, and increase tax revenue through higher corporate profits – all at the same time – through a program called The Low Cost Automobile Insurance Program.

The Low Cost Automobile Insurance Program in California allows low-income residents with good driving records to buy reduced coverage at a reduced price: $350 or less per year is guaranteed for everyone who qualifies.  Drivers also get the option to buy uninsured motorist coverage.

But there’s only one problem with this program:  No Body Uses It!

Most participants in California’s low-cost auto insurance plan stay only temporarily, migrating to standard coverage when their financial situation improves. An estimated 66,000 drivers have used the low-cost program since it launched in the test cities of San Francisco and Los Angeles and expanded statewide in 2007.

“The program provides a lifeline for lower-income folks who really want to do the right thing but are facing the choice of putting food on the table or buying auto insurance,” says Pat McConahay, spokesperson for the state’s Department of Insurance. “It’s a program that people don’t stay on for life. It’s to help them through a difficult time, hopefully.”

ref: FoxBusiness