California's Low Cost Auto Program?

[KPIA]

For those who don't know, California has what they call the Low Cost Automobile Insurance Program designed to serve the poor. Reduced limits for a very low premium. It pays 10% commission and you are not allowed to add a broker fee to it.

I was wondering, who actually writes this stuff? Does anyone here use it?

Not that I am interested in writing it. To me it looks like an obvious loser for agents: Get paid a low commission for writing below minimum limits that has a better than average chance of lapsing and putting the client right back at your desk for a rewrite? I don't see where that would be profitable for an agent.

No agent I know has even tried writing it. Yet it goes on and on... Of course politicians love it because it shows how much they care for the disadvantaged among us. But the reality would appear that it is yet another government flop owing to the standard California pols' lack of understanding how the real world actually works.

So I would love to hear of any experience anyone has had with this program.

 

[Norwayguy]

Low Cost Automobile Insurance Program designed to serve the poor. Reduced limits for a very low premium.

First let me say I am not a P&C agent nor in California. Did I read this correctly that for this program the State has lowered the minimum limits on coverage....Does the state reimburse the victim of a car accident whos damages exceed these reduced limits at least up to the states stated minimum limits?

I just don't get this if they don't provide the additional protection up to at least the states minimum limits the insurance is to protect the people you damage, if you can't afford the coverage maybe you need to make changes in your life.

Whats next reduced or free phone coverage? Oh sorry I'm to late for that...In my state there is the lifeline program for landline phones (the theory is the poor still need to be able to call for help but the phone isn't restricted in its ability to call anyone) And they do it for cell phones for the poor in different programs.

Actually I know Maine has a program for the poor that provides schooling money for a car and pays the insurance...You can't make this stuff up.

 

[KPIA]

No, no make up for the insufficient limits. Just prove you qualify and voila'... You are freed from those pesky state coverage minimums.

The CA DOI (pronounced "doy", as in "I ride the short bus") has a page explaining the nuts and bolts... (Sorry for the lack of a link, I'm still too newb on the forum to post URLs.)

If you go to the CA DOI web site and search for CLCA, it gives links regarding the program.

Appears I am working from dated info. Comms are now 12% with a minimum comm of $35/year. I wonder if they do chargebacks on that $35.

 

[KPIA]

Appears that by trying to post links, a reply I just made must be mod-approved before appearing. Suffice it to say search at the CA DOI web site for CLCA. I guess it now has a min comm of $35 and it now pays 12%, not 10. However, in the report to the Legislature there are indications (though not acknowledged as a problem) that they are having trouble getting producers to sell it.

 

[djs]

The program doesn't actually save anyone any money. Most producers have something in their tool belt that will provide state minimum coverage at a price point equivalent (or lower) than this program.

The coverage is 10/20/3 (rather than the state minimum 15/30/5). The premium in my county is $314 per year (Alameda). You have to be rated as a good driver to get this coverage.

Odds are, I can find you a 15/30/5 auto policy for $314 a year. Ironically, I make less (no $35 minimum), but its the right thing to do for the client.

This is a bad case of the legislature trying to solve a problem that didn't exist.

Dan

 

[Norwayguy]

The program doesn't actually save anyone any money. Most producers have something in their tool belt that will provide state minimum coverage at a price point equivalent (or lower) than this program.

The coverage is 10/20/3 (rather than the state minimum 15/30/5). The premium in my county is $314 per year (Alameda). You have to be rated as a good driver to get this coverage.

Odds are, I can find you a 15/30/5 auto policy for $314 a year. Ironically, I make less (no $35 minimum), but its the right thing to do for the client.

This is a bad case of the legislature trying to solve a problem that didn't exist.

Dan

This is Stupid...why have a minimum and then have a state program that has limits below the Minimum....If the lower limits are good enough let make them the minimum...My question if someone gets hurt by a driver covered underthis program and their claim exceeds the limits can they sue the state?

 

[djs]

This is Stupid...why have a minimum and then have a state program that has limits below the Minimum....If the lower limits are good enough let make them the minimum...My question if someone gets hurt by a driver covered underthis program and their claim exceeds the limits can they sue the state?

Agreed, but, the people in Sacramento don't have to pass an IQ test to get elected. In fact, I've realized smart people can't get elected since they are to smart to realize plans like this are just a waste of money.

And you know that you can't sue the state for this. In addition, the plan is means tested, so if you have any money, you can't get the plan, so those who have nothing, who should have some form of decent insurance, don't.

I don't worry about it though, 15K won't cover the ambulance ride to the ER and a few xrays in the ER. $10K or $15K, it means the person you just hit is pretty much in their underinsured motorist coverage.

Dan

 

[Norwayguy]

I just wish I had been there for the debate on this...I would have loved to here the response to what had to be a question..

If these limits are okay why do we mandate something else entirely...

 

[GreenSky]

Agreed, but, the people in Sacramento don't have to pass an IQ test to get elected. In fact, I've realized smart people can't get elected since they are to smart to realize plans like this are just a waste of money.

I know this wasn't directed at me, but since I was unable to get elected, I thank you.

Rick

 

[Surfy]

I have toyed around with the idea. I just don't want to get hit by someone that I sold it to. This yearly premium in this county is $264 plus $37 for the UM for 10/20/5.

Seems like it recently used to cost a little less and I thought the coverage was 5/10/3.

If I did sell it, I would only take the whole year's premium up front and only take cash or money orders. NO CHECKS!

Monthly billing would only make me the babysitter and probably half of the checks would not be any good.

Surfy