California drivers need low-cost auto insurance program.

Byline: Dave Jones 

A 1 percent increase in the unemployment rate is associated with an increase of three-quarters of 1 percent in the uninsured motorist rate. That's the conclusion reached by the Insurance Research Council's 2008 Uninsured Motorists report.

California state law requires that every motorist be insured. Not all drivers can afford the average premiums, which is why California's low-cost automobile insurance program was created in 1999. The law permitting the low-cost auto program is currently scheduled to end. Assembly Bill 725 would extend the program until 2016. It passed the Legislature with bipartisan support and is now on the governor's desk awaiting his signature.

With today's tough economic times and the unemployment rate rising, this program is crucial for the residents of our state.

We are all safer if all drivers are insured. Since the program's inception in 2000, the low-cost auto program has provided more than 45,000 policies. According to the nonprofit Consumer Watchdog, in the past three years the low-cost auto program covered about $8 million worth of injuries, property damage and medical bills associated with accidents involving the program's policyholders. As most of the program's policyholders are previously uninsured drivers, these accidents would likely have been covered by the innocent drivers' uninsured motorist coverage.

Californians who lose their jobs and are scraping by on unemployment benefits can apply for the low-cost auto insurance program based on their lower unemployment income, keeping their auto insurance intact and enabling them to use their cars for job interviews and to take their children to school.

To be eligible, your household income must fall within 250 percent of the federal poverty level and you must be a good driver. For instance, a family of four with a household gross annual income of $55,125 would qualify for the program.

The program is also a good deal for taxpayers. Without the program, taxpayers may have to pay when uninsured drivers are hurt in an accident and turn to the public health system to care for their injuries. Additionally, state law requires that premiums collected through the low-cost auto program cover losses and expenses. This law helps low-income families without costing taxpayers a dime.

The low-cost auto program has also been successful in bringing low-income individuals to seek out quality insurance policies for affordable prices. The low-cost program brings people in the door, and insurance agents frequently offer a better policy for a slightly higher rate. Thus, many low-income individuals who do not hold low-cost auto policies also benefit from the program.

The governor has until Sunday to sign or veto this bill. As long as our state requires all drivers to be insured, we should continue offering Californians a state-backed opportunity to follow the law and protect all Californians on the road.