Wednesday, January 9, 2008


States have tried many tactics to reduce the number of uninsured drivers-vehicle impoundment, jail terms, and laws limiting the rights of the uninsured to make claims against insured drivers. And while the rate of drivers with no car insurance has declined, there is still up to a one-in-three chance, depending on where you live, that a car that collides with yours will be driven by an uninsured motorist, according to a study last year by the Insurance Research Council. When that happens, of course, accidents can turn into nightmares. The full cost of your medical bills and property damage can be unrecoverable.

California, which is among states with the most expensive auto insurance and whose rate of uninsured motorists is among the highest, is trying to solve its problem in a new way. In Los Angeles and San Francisco counties, low-income residents with good driving records are now eligible for bare-bones auto insurance costing $450 per year in Los Angeles and $410 per year in San Francisco. (Unmarried men between 19 and 24 pay a 25 percent surcharge.) Up to now, these same drivers were reportedly charged double or triple those rates. The four-year pilot program began this summer.

"This landmark program was sparked by the dilemma faced by hundreds of thousands of uninsured low-income drivers who are required by law to carry auto insurance but who cannot afford to do so," says Norma P. Garcia, a senior attorney in Consumers Union's West Coast Regional Office, which strongly supported the state legislation that created the program. "This opens the door for safe low-income drivers to buy affordable auto insurance, allowing them to drive legally."

Fewer than 300 motorists had signed up as of early September, a number that officials are hoping to boost with a billboard campaign and streamlined registration. Consumers Union is also trying to promote the low-cost policies. With the help of a $20,000 grant from the nonprofit California Consumer Protection Foundation, Garcia and other advocates will be targeting community groups and other institutions in San Francisco County to get the word out to eligible consumers.

Ultimately, low-cost insurance could be a boon to all insured California motorists. With fewer uninsured drivers on the road and in accidents, the cost of uninsured-motorist coverage would likely decrease. That's one intent of the program. And success of the pilot could help more than California, where slightly more than one in four vehicles is )uninsured. States including Connecticut, Kentucky, Louisiana, and Washington are watching the initiative to gauge its effectiveness, says Richard Manning, regional director of the nonprofit California Automobile Assigned Risk Plan, a group supported by the insurance industry that administers the program.