A Guide to California’s Low-Cost Auto Insurance Program
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Written byJ.J. Starr
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J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
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Edited byLequita Westbrooks
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Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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Table of contents
California drivers face some of the highest car insurance premiums in the nation, with the average policy costing $159 per month, according to Compare.com data. The state’s high insurance rates create a significant financial burden, especially for people with low incomes who struggle to find affordable basic coverage.
Fortunately, the California Low Cost Auto (CLCA) Insurance Program offers affordable auto coverage for qualifying drivers. By providing reduced-cost liability insurance, the CLCA ensures that low-income drivers can stay insured and comply with state requirements.
In this guide, we’ll explore how the program works, the eligibility requirements, and how you can apply for coverage.
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What Is the California Low Cost Auto Insurance Program?
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Established in 1999, the CLCA Program — managed by the California Automobile Assigned Risk Plan (CAARP) — provides affordable liability insurance to low-income drivers in California who meet eligibility requirements. The program aims to reduce the number of uninsured drivers by giving more residents access to basic, affordable auto insurance coverage.
The CLCA Program offers liability insurance at significantly reduced rates, making it easier for qualifying drivers to meet California’s minimum insurance requirements. It directly benefits people who are most vulnerable to insurance lapses, which promotes safer roads and better financial protection for everyone.
If you qualify, you can apply for CLCA coverage online or in person with an agent. The good news is that there’s no cost to apply and the low rates offer incredible savings — but only for low-coverage policies.
You can visit the official California Low Cost Auto Insurance Program for more details.
CLCA Eligibility Requirements
The CLCA Program is a state-sponsored program for low-income drivers in California needing affordable rates. To qualify, you must:
Possess a valid California driver’s license
Own a car worth no more than $25,000
Have no more than two vehicles registered in your name
Meet the required income limits
Be 16 years old or older
Have legal emancipation if you’re under 18
Maintain a clean driving record
Now that we’ve covered the basics, let’s explore some important eligibility details.
Income requirements
You must provide documentation — such as recent pay stubs, W-2 Forms, 1099 Forms, or tax returns — to prove your income eligibility. Alternatively, you can use a Social Security or pension letter, Medi-Cal card, EBT card, and other documents from California assistance programs.
The program counts income from all household members. The limit increases by $13,450 for each additional person. Here are the income limits per household size:
Household Size ▲▼ | Income Limit ▲▼ |
|---|---|
| 1 | $37,650 |
| 2 | $51,100 |
| 3 | $64,550 |
| 4 | $78,000 |
| 5 | $91,450 |
Driving record requirements
To qualify, you need a good driving record. That means that within the last three years, the state hasn’t found you mostly at fault (51% or more) for a crash that resulted in injury or death. You also can’t have any felonies or misdemeanors on your record or more than one point on your license, according to the CLCA.
What Coverage Does the CLCA Program Offer?
The CLCA offers essential coverage options tailored for low-income drivers. Under this program, only liability policies are available. These policies cover damage and injuries to others if you’re at fault in an accident.
Let’s take a closer look at your basic coverage and optional coverages.
Basic liability coverage
The CLCA Program includes two types of basic liability coverage:
Bodily injury liability: Covers other people’s medical expenses, with limits of $10,000 per person and $20,000 per accident.
Property damage liability: Covers damages to other people’s property, with a limit of $3,000 per accident.
Keep in mind these limits are lower than standard policies. That leaves you potentially more vulnerable — you’re personally responsible for any damages you owe over these limits.
Optional coverages
Liability car insurance doesn’t cover you or your vehicle if you get into an accident. Consider adding the following coverages for an additional cost to protect yourself.
Uninsured motorist bodily injury: Covers your and your passengers’ medical expenses if an uninsured driver causes an accident, with limits of up to $10,000 per person and up to $20,000 per accident.
Medical payments: Covers medical expenses for you and your passengers, regardless of fault, with limits up to $1,000 per injured person.
Adding these optional coverages can provide more financial protection to help you avoid out-of-pocket expenses.
How to Apply for the CLCA Insurance Program
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Applying for the CLCA low-income car insurance program is straightforward. You can do it online or through a local agent and get insured quickly. Here’s how:
Online
To apply online, visit the official CLCA website and complete the eligibility questionnaire to determine if you qualify. You’ll need to provide information on your driver’s license, vehicle registration, and proof of income. You’ll also need funds for the initial deposit on your policy.
If you don’t have a reliable internet connection or need further assistance, call 1 (866) 602-8861.
Through a local agent
You can also speak with a local agent who can guide you through the CLCA process and help you compare car insurance options. Using an agent brings the added benefit of receiving personalized assistance from an expert.
Your agent can assist you through the application process, including determining your eligibility and getting you coverage. You’ll still need all the necessary documentation to streamline the process.
How Much Does a CLCA Policy Cost?
The cost of a CLCA policy varies depending on your county, age, and driving record. Annual premiums typically range from $198 to $802, according to the CLCA. But you can qualify for additional discounts if you have a clean driving record.
For example, a 25-year-old driver continuously insured for the last three years pays an estimated $396 annually in Humboldt County. That same driver will pay an estimated $802 annually in Alameda County. You can use the CLCA’s online calculator to estimate your rate.
You have two payment options with the CLCA Program. First, you can pay for the policy in full, which is the cheapest option. Alternatively, you can pay a one-time 20% down payment and cover the remaining balance in seven installments. But you’ll pay a $4 processing fee with each installment payment.
How Low-Income Drivers Can Save on Auto Insurance
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Many factors influence car insurance rates, including your age, driving history, ZIP code, and local state laws. All drivers must meet state minimum insurance requirements — no matter your income. But low-income drivers face more difficulties finding affordable coverage.
Here are some tips to keep car insurance costs low if you’re a low-income driver:
Opt for a higher deductible: Choosing a higher deductible can lower your premium, but you’ll pay more out of pocket if you cause an accident.
Maintain a clean driving record: Good drivers pay some of the cheapest car insurance rates compared to drivers with infractions on their records, so try to avoid tickets and other moving violations.
Use car insurance discounts: Look for discounts, especially for good driving, bundling policies, and telematics programs.
Limit mileage: Some insurers offer lower rates if you drive less frequently or opt for pay-per-mile insurance.
Compare quotes from multiple companies: Different insurers offer different rates, so comparing options can help you find the most affordable policy.
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California Low Cost Auto Insurance Program FAQS
Here are answers to common questions about the California Low Cost Auto Insurance Program to help clarify important aspects of it.
Can you purchase full-coverage car insurance from CLCA?
No, you can’t purchase full-coverage car insurance under the CLCA. The CLCA Program only offers liability coverage, which meets California’s minimum insurance requirements.
How many cars can be on a CLCA policy?
You can insure up to two vehicles with a CLCA policy, and you must insure every car you own, meaning you can’t own more than two vehicles and still qualify for the CLCA Program.
Do you have to enroll all vehicles in the CLCA program?
Yes, the CLCA Program requires you to include all the vehicles registered in your name. But it doesn’t cover motorcycles or commercial vehicles.
Does your income affect the cost of car insurance in California?
While your income determines eligibility for the CLCA, it doesn’t affect the cost of car insurance in California. But the CLCA Program provides lower-cost options for drivers who qualify based on income.
What happens if you drive without insurance in California?
If you drive without insurance in California, you’ll face penalties, including license suspension, vehicle registration suspension, reinstatement fees, and financial liability if you drive and get into an accident without insurance.
Data Methodology:
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
Sources:
California’s Low Cost Auto Insurance, “FAQ,” accessed September 6, 2024.
California’s Low Cost Auto Insurance, “‘Good Driver’ Eligibility,” accessed September 6, 2024.
California Department of Insurance, “FAQ,” accessed September 6, 2024.
California Department of Insurance, “Insurance Requirements,” accessed September 6, 2024.
California Department of Insurance, “California Driver’s Handbook,” accessed September 6, 2024.
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J.J. StarrInsurance Writer
J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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