California Low Cost Automobile Insurance Program (LCA)

Is this the right car insurance for you?

• The CA Low Cost Automobile Insurance Program is for low-income good drivers.

• In order to buy this insurance you must meet certain rules.

• This insurance will allow you to register and drive your car.

• This Program is only available to good drivers [as described in the CA Insurance Code].

Take this simple test to find out!

California Low Cost Automobile Insurance Program (LCA)

What Is It?

A program established by the California Legislature that provides low-income good drivers with low cost auto insurance coverage.  The California Low Cost Automobile Insurance Program (LCA) is administered by the California Automobile Assigned Risk Plan (CAARP).

Who Is Eligible?

Only low-income good drivers are eligible for this coverage. Applicants also must reside in California and the current value of their vehicle cannot exceed $20,000. Eligibility is based on the household’s gross annual income which must be 250% or less of the federal poverty level. Click here to view chart.

What Coverages Are Available?

• Liability limits of $10,000 bodily injury or death per person, $20,000 bodily injury for each accident and $3,000 property damage for each accident. These limits will satisfy the state’s current financial responsibility laws.

Optional coverages include:

• Medical Payments Coverage at $1,000 per person

• Uninsured Motorist Bodily Injury at limits of $10,000/$20,000

Physical Damage (Comprehensive & Collision) coverage IS NOT available under this Program.

What is a “good driver”?

The good driver requirements apply to both the applicant and any licensed driver in their household.

• Must be at least 19 years of age and has been continuously licensed to drive for the past 3 years.*

• Have no Vehicle Code felony or misdemeanor convictions on their driving record.

• Have no at fault accidents involving bodily injury or death in the past 3 years.

• Have not had more than one, or both, of the following in the past 3 years:

• A property damage only accident in which they were principally at fault, or

• A point for a moving violation.

• Cannot be a college student claimed as dependent for federal/state income tax purposes.

*  Individuals who were previously licensed in another country other than the U.S. or Canada and can demonstrate that they have been continuously licensed for 18 months in the U.S. or Canada, are also eligible.

What Does it Cost?

The cost of this insurance is based on the applicant’s county of residence. Click here to the get list of rates. 

What are the Payments Plans?

• Full Annual Premium     

• $125 Deposit with balance to be paid within 30 days.

• Option 1 = $100 Deposit with balance to be paid in 6 bi-monthly installments.*

• Option 2 = $125 Deposit with balance to be paid in 5 bi-monthly installments.*

• Option 3 = Deposit of 15% of total premium with balance to be paid in 6 bi-monthly installments.*

*  There will be a $4.00 per installment fee for Payment Options 1, 2 & 3. Bi-monthly means every other month a payment is due.

No Outside Premium Financing is allowed!

How Does One Apply?

If you meet the eligibility requirements, you need to contact a certified producer with the California Automobile Assigned Risk Plan/California Low Cost Automobile Insurance Program. They will help you complete an application for this insurance

• If you need a list of certified producers in your area, contact CAARP’s Customer Service Department at their toll free number 866-602-8861 or Email them at caarp@aipso.com

• Once you find a certified producer in your area, they will help you complete an application for insurance, plus collect the required deposit and documents needed for this Program.

• Once the producer has completed the application, they will mail everything to the CAARP office in San Francisco.

What do I Need to give my Agent?

Applicants will have to provide income verification in the form of one of the following:

• A copy of their federal or state income tax return if filed in the previous calendar year, or if filed in the current year, whichever is most recent, or

• Other reliable evidence from a governmental agency or government means tested program verifying the applicant’s current annual gross income.  See box below for examples of acceptable income proof.

Applicants must also provide: 

• Check or money order made payable to CAARP/CA Low Cost Program.

• Copy of the driver’s license for ALL drivers in the household

• Copy of the vehicle registration or proof of vehicle ownership.

NOTE: You can pay CAARP/Low Cost Program directly. Your agent/producer does not have to submit their check on your behalf.

Can the Producer Charge Me Extra Fees?

No. Per 11624.5 of the California Insurance Code, producers CANNOT charge their clients ANY fee when submitting an application through the California Low Cost Automobile Insurance Program. The producer will be paid commission by the assigned insurance company. This means no “broker fees”, “paperwork fees”, or MVR fees can be charged.

When Is Coverage Effective?

Only Certified Producers may submit applications to the California Low Cost Automobile Insurance Program and obtain immediate coverage through CAARP’s Electronic Effective Date Procedure (EEDP) or through the online application system called EASi. Proposed effective dates are only honored if the producer complies with all of the rules governing the EEDP and/or EASi.

Applications submitted without using the EEDP or EASi will become effective at 12:01 A.M. the day after receipt in CAARP’s office. Future effective dates are also available via the EEDP and EASi. To receive a future effective date, CAARP must receive the application before that requested date.

How Long Will It Take Before I Know I Am Insured?

Once CAARP receives the application with attached documents and deposit, it will determine whether or not the applicant is eligible per the requirements of the Program. There are 3 possible scenarios:

1. Applicant is determined to be eligible and application with deposit is assigned to an insurance company. Assignment notices are mailed to both producer and inured. The Insurance Company receives the application, attached documents and deposit.

2. Applicant is temporarily determined to be eligible, but required information/documentation is missing. Application is RETURNED to the producer to complete or attach the missing information within 10 working days. If missing information is returned within the 10-day time span and satisfies the requirements of the Program, the application will be assigned. 

3. Applicant is determined to be not eligible and application for insurance is REJECTED. Both applicant and producer will be notified in writing with the reason(s) for rejection and the application with deposit will be returned to the producer of record. THERE WILL BE NO COVERAGE. Note: If producer uses EASi, the system will determine immediately whether the applicant is a “good driver” and considered eligible.

When Can a Company Cancel?

Like with any insurance, the Low Cost policy can be canceled if the applicant fails to pay their premiums, or if the company determines there is any fraud or misrepresentation.  The policy can also be cancelled if the company discovers there is other liability insurance in the household (vehicles not insured through the Low Cost Program).

Can I Choose the Assigned Company?

No.  Applications are assigned via a random assignment process.

Can the Producer Retain Commission?

No. The producer is required to send the application with the appropriate gross deposit premium to the Plan. The assigned insurance company will pay the producer his/her commission upon issuance of the policy.

Where Do I Report a Claim?

Each company sends information with every policy about how and where to report claims. Contact the company directly as soon as information about a claim is known.

What Should I Do If I Have a Problem?

If you experience a problem with the assigned company or your producer regarding your insurance, it is recommended to call the company or producer directly to try and solve the problem. If the problem cannot be resolved, contact CAARP/LCA Program at 866-602-8861 and a customer service representative will try to assist you.  Se Habla Espanol !

What Else Do I Need to Know About this Program?

• There is a maximum of one car per Low Cost Auto Insurance policy. (You cannot add other cars to an existing policy.)

• Only two Low Cost policies can be purchased per person, per household.

• The policy term is for one year with annual renewals. If the applicant still meets all of the eligibility requirements at renewal, the company must offer a renewal.

• A Low Cost policyholder cannot purchase additional liability insurance coverage for their covered vehicle(s), but they can purchase physical damage coverage elsewhere