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CA Department of Insurance

New law to reduce number of uninsured drivers on California’s roads

News: 2014 Press Release

For Release: September 19, 2014
Media Calls Only: 916-492-3566
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New law to reduce number of uninsured drivers on California’s roads
Low-income motorists to benefit from affordable insurance options as AB 60 reforms of 2013 are implemented

SACRAMENTO, Calif. - More low-income Californians will now have the opportunity to purchase affordable automobile insurance. Senate Bill 1273 (Lara), sponsored by Insurance Commissioner Dave Jones, expands and enhances California's Low-Cost Automobile Insurance Program (CLCA) to include non-citizen individuals who qualify for California drivers' licenses next year, thanks to legislation signed today by Governor Jerry Brown.

The new law makes necessary reforms and enhancements to the CLCA to ensure that all of California's low-income drivers have access to affordable auto insurance options. These reforms and enhancements will increase overall participation in the program.

"This bipartisan bill was the single most important action that the Legislature took this year to reduce the estimated three million uninsured vehicles on California's roadways," said Commissioner Jones. "The signing of this bill will allow a substantial number of individuals to be eligible for a low-cost insurance option that would otherwise be unavailable. By reducing the number of uninsured drivers, this law will help protect all California motorists. I'd like to sincerely thank Senator Lara for partnering with me and for his tireless efforts to help newly licensed drivers."

SB 1273 increases compliance with the state's mandatory auto insurance law in two broad ways. The bill modifies and reforms eligibility requirements for CLCA, which has helped more than 70,000 low-income individuals purchase affordable automobile insurance since the program's inception in 2000. The bill also recognizes the DMV-estimated 1.4 million non-citizen individuals who will receive drivers' licenses pursuant to the governor's signing of AB 60 in 2013. An unknown but likely substantial percentage of these licensees would meet all eligibility criteria of CLCA, except for the requirement of three years of documented driving experience. This bill allows those individuals to qualify for the actuarially sound program, which is backed by insurance rates required to cover the appropriate cost of the risk pool.

The new law will go into effect January 1, 2015.

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Media Notes:

  • SB 1273 was supported by the California Catholic Conference, California Immigrant Policy Center, Coalition for Humane Immigrant Rights of Los Angeles, Coalition of California Welfare Rights Organizations, Consumer Federation of California, Friends Committee on Legislation of California, Greenlining Institute, Personal Insurance Federation of California, State Farm Mutual Automobile Insurance Company, and United Farmworkers of America

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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