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NEWS RELEASE
Jun 30, 2000


CONTACT: Doug Heller - 310-392-0522 x309

"Lifeline" Auto Insurance Available Saturday, July 1

Historic Insurance Program Will Make Auto Policies Available to Poor
Los Angeles-- State Senator Martha Escutia (Montebello) and consumer advocates with the Foundation for Taxpayer and Consumer Rights (FTCR) announced the official launch of the "Lifeline" low-cost auto insurance program at a news conference on Friday. The insurance program, which was created through 1999 legislation (SB 171) authored by Senator Escutia and sponsored by FTCR, requires all insurance companies to underwrite a $450 per year insurance policy for qualifying low-income drivers in Los Angeles County. The policy will be first available on Saturday July 1, 2000.

"Low-income drivers have been priced out of the insurance market for years, leaving poor people with the unfair choice of illegally driving without insurance or not driving at all," said consumer advocate Doug Heller of FTCR. "Starting July 1, low-income motorists in Los Angeles will finally have access to an affordable auto insurance policy."

The Foundation for Taxpayer and Consumer Rights also announced the formation of the Lifeline Insurance Implementation Project. The Lifeline Project will work to create public awareness about the low-cost insurance program and to ensure that regulations and future legislation continue to serve the needs and interests of low-income motorists and all California consumers.

"This program has broad benefits, because when more people have insurance, the less risk anybody has of being hit by an uninsured driver, and that will lower the insurance rates of all drivers," said Heller.

The low-cost policy, which is also available in San Francisco, is the first low-cost "flat-rate" policy of its kind in the nation. Regardless of where a driver lives in Los Angeles County, the annual premium is a flat-rate $450, except that unmarried male drivers age 19-24 pay a 25% surcharge, for a total of $562.50. To qualify for the policy, drivers must be low income -- earning less than 150% of the poverty level, which is $25,575 per year, per household -- and they must be a good driver with no more than one violation point on their driving record. According to FTCR estimates, approximately 500,000 Angelenos qualify for the Lifeline policy.

The Lifeline policy will be underwritten by all of the state's insurance companies, but will be sold through the California Automobile Assigned Risk Plan (CAARP), a state run agency. Low income drivers can call most local insurance agents to sign up with the plan or they can call (800) 622-0954 to learn more about where they can purchase Lifeline Insurance.

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