California's Low Cost Auto Insurance Program Provides Affordable Insurance for Those Eligible

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Auto insurance is a requirement if you have a valid driver's license and drive a vehicle in the state of California. The California Low Cost Auto (CLCA) Insurance program is a state-sponsored program that makes auto insurance more affordable to those meeting eligibility requirements.

To qualify, you must 1) have a valid California driver's license; 2) own a vehicle valued at $25,000 or less; 3) meet income eligibility guidelines; and 4) be at least 16 (under 18 must be legally emancipated) or older.

Maximum income requirements are based on the size of your household. As of 2024, that maximum is $37,650 for a household size of 1, increasing by $13,450 for each additional household member (e.g. household of 4 maximum income is $78,000.

Annual premiums vary by county. If you live in Ventura County, have been licensed continuously for 3 years and are not a 19-24 years of age and unmarried, your annual premium is $275 ($358 if you are an unmarried 19-24 year old).

While the premiums are great, the coverage is very limited. A basic policy includes only up to $10,000 per person and up to $20,000 per accident for bodily injury or death and up to $3,000 for property damage. Comprehensive and collision is not included in these policies (they would have to be purchased separately).

Learn more and sign up at www.mylowcostauto.com.

California Drivers Are Not Necessarily Required to Have Auto Insurance

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Yes, it is true, technically, the law does not state that drivers in California MUST carry auto insurance.

However, California Vehicle Code Section 1656.2 does have certain "compulsory financial responsibility" requirements most easily met by maintaining valid auto liability insurance that covers, at a minimum, $15,000 for injury/death to one person, $30,000 for injury/death to two or more persons and $5,000 for property damage.

Alternatively, the law allows financial responsibility to be met in one of three other ways: a cash deposit of $35,000 with the DMV, a DMV-issued self-insurance certificate or a surety bond for $35,000.

Now, if someone can actually afford to leave a $35,000 deposit with the DMV, they probably have a lot more assets that could be put at risk without adequate insurance in place. Probably not a good idea. I called the DMV Financial Responsibility Unit. Apparently some people leave the cash deposit who feel they spend too much on premiums over the years. Or perhaps if they import a car that is difficult to insure.

I also asked about the "self insurance" option and laughed when I heard you need a net worth of at least $2.2 million and a fleet of 25 or more cars. Not really geared toward most individuals.

Posting a surety bond for $35,000 is an alternative to insurance but the cost can be significant, generally ranging from 1 to 5% of the value of the bond.

A Low Cost Auto Insurance Alternative

As we know, auto insurance can be expensive. The California Low Cost Automobile (CLCA) Insurance Program was established in 1999 to help income-eligible drivers with good driving records purchase liability insurance that meets State requirements.

To qualify for a CLCA insurance policy, you must

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