The California Senate approved a bill that would expand eligibility for the current low-cost automobile insurance program to middle-income drivers, a measure that will force insurers to increase premiums for non-urban drivers to subsidize potential losses, according to the Alliance of American Insurers.
Two years ago, the state Legislature app-roved a low-cost automobile pilot program for low income drivers in the counties of Los Angeles and San Francisco that offered policy limits of 10/20/3 ($10,000 bodily injury liability injury coverage per person/$20,000 bodily injury liability per occurrence/$3,000 property damage liability coverage). The law required initial rates to be set at $460 in Los Angeles and $410 in San Francisco, with annual adjustments made by the Insurance Commissioner based on actuarially sound experience information.
With the passage of SB 1427, Senators Martha Escutia (D-Montebello) and Jackie Speier (D-Hillsborough), who represent constituencies in Los Angeles and the San Francisco Bay Area, respectively, have successfully pushed through legislation that would remove the 2004 sunset date for the pilot program, lower premiums to $319 for both counties and add $1,000 in medical coverage.
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