BILL ANALYSIS
AB 725
Page 1
ASSEMBLY THIRD READING
AB 725 (Jones and Torres)
As Amended March 25, 2009
Majority vote
INSURANCE 10-0 APPROPRIATIONS 13-1
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|Ayes:|Coto, Garrick, Blakeslee, |Ayes:|De Leon, Ammiano, Charles |
| | | |Calderon, Davis, Fuentes, |
| |Charles Calderon, Carter, | |Hall, Harkey, |
| |Feuer, Hayashi, Nava, | |John A. Perez, Price, |
| |Niello, Torres | |Skinner, Solorio, Audra |
| | | |Strickland, Torlakson |
| | | | |
|-----+--------------------------+-----+---------------------------|
| | |Nays:|Nielsen |
| | | | |
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SUMMARY : Extends from January 1, 2011, to January 1, 2016, the
sunset date on the California Low-Cost Automobile Insurance
Program.
EXISTING LAW :
1)Requires that all drivers on public roads be insured.
2)Establishes the California Low-Cost Automobile Insurance
Program to make available low-cost automobile insurance
throughout California. This program is administered by the
California Automobile Assigned Risk Plan (CAARP), an entity
that is subject to the authority of the California Department
of Insurance (CDI). All insurers authorized to transact
liability insurance must participate in CAARP and accept an
equitable apportionment of applicants for automobile insurance
who are unable to purchase insurance through ordinary methods.
3)Specifies that the California Low-Cost Automobile Insurance
Program is available to each individual whose family income
does not exceed 250% of the federal poverty level, is at least
19 years of age, has been continuously licensed for the
previous three years, meets the good driver standard (no more
than one at-fault property damage only accident or more than a
point for a moving violation in the past three years), has a
AB 725
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vehicle valued at $20,000 or less, and is not a college
student claimed as a dependent of another person for income
tax purposes.
4)Sets the sunset date of the California Low-Cost Automobile
Insurance Program on January 1, 2011.
FISCAL EFFECT : Minor absorbable workload to the CDI to continue
the implementation of the California Low-Cost Automobile
Insurance Program.
COMMENTS :
1)The primary goal of the California Low Cost Automobile
Insurance Program is to provide an affordable auto insurance
option to low-income good drivers.
2)The California Low-Cost Automobile Insurance Program is not
subsidized by taxpayers. The rates are set and adjusted
annually in each county so that the premiums are sufficient to
cover losses and expenses in each county. The program is now
available statewide. It provides $10,000 bodily injury
coverage for one person, $20,000 bodily injury coverage for
all persons, and $3,000 for damage to property of others. The
coverage costs less than $400 per year. In 2007, this program
had 11,519 low-cost policies in force.
3)In 1999, SB 171 (Escutia), Chapter 794, Statutes of 1999,
established the California Low-Cost Automobile Insurance
Program in Los Angeles County; and, in that same year SB 527
(Speier), Chapter 807, Statutes of 1999, established the
California Low-Cost Automobile Insurance Program in the City
and County of San Francisco. In 2005, SB 20 (Escutia)
extended the California Low-Cost Automobile Insurance Program
to six additional counties and provided authority for the
program to be extended statewide, based upon the Assembly
Insurance Commissioner's determination of need for that
insurance.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086
AB 725
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FN: 0000432