BILL ANALYSIS
AB 725
Page 1
Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 725 (Jones) - As Amended: March 25, 2009
Policy Committee: Insurance
Vote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill extends the sunset on the California Low Cost
Automobile Insurance Program (CLCAP) from January 1, 2011 to
January 1, 2016.
FISCAL EFFECT
Minor absorbable workload to the California Department of
Insurance to continue implementation of CLCAP.
COMMENTS
1)Rationale . This bill extends the sunset for CLCAP to reduce
the number of uninsured drivers on California roads and make
insurance available to and affordable for more consumers. To
the extent more low-income drivers retain car insurance, this
program reduces Medi-Cal and county indigent health care costs
of uninsured motorists. Annually, almost 9,000 drivers acquire
car insurance through CLCAP.
2)Existing Law . The CLCA has provided an affordable insurance
option for low-income drivers in Los Angeles and San Francisco
counties. Basic CLCA liability policies provide up to $10,000
for bodily injury or death per accident, a maximum of $20,000
for bodily injury or death per accident and up to $3,000
property damage for each accident. Annual premiums are less
than $400.
3)Related Legislation . SB 171 (Escutia), Chapter 794, Statutes
of 1999 and SB 527 (Speier), Chapter 807, Statutes of 1999
established the CLCA pilot programs in Los Angeles and San
AB 725
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Francisco in 2000. SB 20 (Escutia), Chapter 435, Statutes of
2005 extended CLCAP to six additional counties and authorized
the program statewide.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081