Some believe it is doomed for failure.
The California auto insurance industry is used to leading the country in terms of legislation, but a recent decision aimed to decrease the number of uninsured drivers is receiving significant criticism regarding its practical application.
There are currently some states with over one quarter of drivers without any coverage at all.
Though the majority of those states do have a requirement for motorists to prove that they have some form of coverage, the threat of consequences – whether they be a suspension of the license or some form of fine – don’t seem to be getting the job done. Furthermore, what is being discovered is that it is the demographic that can afford the least – the youngest drivers – who have the highest premiums. Many are therefore forced to weigh the risks and use the limited money they do have to cover other essentials in their lives.
California’s solution was the Low Cost Automobile Insurance Program.
This program for affordable California auto insurance was designed to let individuals in the lowest income brackets and who have maintained a solid good driving record buy a minimum amount of coverage at a notably reduced price – at $350 per year or less. These motorists also have the option to purchase additional uninsured motorist coverage.
However, what is being found is that only a sliver of those who qualify are actually buying it.
The state is currently managing this program, though it is not funded by taxpayer money. Insurers volunteer to provide direct sales of this coverage, just as they do with other types of policies. This allows those companies to add the policyholders to their rolls, which means that customers may choose to upgrade their coverage with their insurer or may opt to stick with them later on when they are able to afford to buy a full policy.
_________________________Random Success Quotes to Remember ~ “Successful people do what unsuccessful people are not willing to do. Don't wish it were easier; wish you were better..” - Jim Rohn
The majority of the drivers who are using this low cost California auto insurance program do so only on a temporary basis, eventually moving up to a standard policy when they see improvements to their financial situation. Since it first launched in 2007, there have been approximately 66,000 drivers who have used it.
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