California's Lifeline Auto Insurance Program - FAQ's & Answers
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FACTSHEET

California's Lifeline Auto Insurance Program - FAQ's & Answers


CALL 1-800-622-0954 for a LIFELINE Insurance Agent Near You

The Lifeline Auto Insurance program makes a low-cost auto insurance policy available to qualifying, low-income drivers. The program is a result of a 1999 California law -- SB 171 -- developed and sponsored by The Foundation for Taxpayer and Consumer Rights. The bill was authored by Senator Martha Escutia (Montebello, CA) and signed by Governor Gray Davis on October 7, 1999.

Who qualifies for the Lifeline Auto Insurance Plan?
  • Californians in Los Angeles and San Francisco counties whose annual household income equals or is less than 150% of the official poverty level.
  • Only those qualifying low-income motorists who qualify as good drivers: no more than one violation point accrued in any three year period.
When will Lifeline Auto Insurance be available to the public?
The Lifeline policy is now available to qualifying motorists.

How can a motorist sign up for Lifeline?
Call 1-800-622-0954 to receive information about the nearest Lifeline agent. Or, call a local agent. Many insurance agents are certified to sell Lifeline.

How much does it cost?
  • $450 per year in Los Angeles ($562.50 for unmarried male drivers ages 19-24);
  • $410 per year in San Francisco ($562.50 for unmarried male drivers ages 19-24)
Who will sell the Lifeline policy?
  • All insurance companies selling auto insurance in the state will be required to sell Lifeline policies.
  • Companies have to sell a certain percentage of Lifeline policies according to their market share of private passenger auto insurance.
  • Lifeline will be administered through the California Automobile Assigned Risk Plan.
Are uninsured motorists high risks for insurance companies?
No. A recent Department of Insurance study reports that 87% of uninsured motorists qualify as "good drivers." This policy is only available to "good drivers".

What are the coverage limits of the Lifeline policy?
The Lifeline policy provides liability coverage only, with maximum coverage of $10,000 per individual/$20,000 per accident/$3000 property damage. This level is adequate to cover 85% of auto accidents.

This policy covers less than financial responsibility laws require. Could that lead insurers to offer lower coverage than the laws otherwise require?
No. This coverage is allowed for, and only for, Lifeline policyholders.

To make the policy affordable to low-income motorists the liability coverage must be slightly reduced.

Will the availability of this policy result in low-income Californians who are presently insured substituting the Lifeline policy for the higher priced policy they buy?
In some instances it will. The majority of policies, however, will be sold to presently uninsured drivers. The Lifeline policy should be available to anyone at or below the qualifying income level. The two-fold purpose of a Lifeline policy is to reduce the number of motorists who drive without insurance and to provide relief, through an affordable policy, for low-income motorists who are presently paying auto insurance premiums which are beyond their means.

Will insured Californians see an increase in premiums to subsidize the Lifeline premiums?
No. Although consumers subsidize electric and telephone lifeline programs, the costs of Lifeline auto are entirely covered by the low-income policyholder; it does not require a subsidy. In fact, insurance companies will be able to pass on insurance savings of $100-$200 million. This savings to already insured Californians comes from a reduction in uninsured motorist claims and therefore a reduction in Uninsured Motorist and Collision premiums.














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