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State Offers Low-Cost Car Insurance

Program in place until January 2011

State insurance officials estimate 18 percent of drivers will let their car insurance lapse in this tough economy, but California's Low Cost Automobile Insurance Program could help some motorists stay legal.

Annual liability premiums run as low as $262 in Riverside County and $274 in San Bernardino County through the program, said Jason Kimbrough, spokesman for the California Department of Insurance.

With unemployment in San Bernardino and Riverside counties at double-digit percentage rates, there's a great need for people living in the Inland Empire to look at this option, Kimbrough said.

Use of the low-cost auto insurance program rose 55 percent in San Bernardino County and 39 percent in Riverside County for the 12-month period ending in April, Kimbrough said.

Overall, the program saw an 18.9 percent statewide increase last year.

Rates are set and adjusted in each county so annual premiums adequately cover losses and expenses.

It's natural for drivers to consider every cost-cutting option when the economy tanks, said California Insurance Commissioner Steve Poizner, who's a candidate for California governor this year.

“But too often, drivers make the dangerous and illegal choice to forgo auto insurance,” Poizner said.

All drivers are required by state law to have minimum levels of liability insurance. Penalties range from a suspended license to an impounded car and fines.

Drivers thinking about dropping car insurance can check to see whether they're eligible for the program, which is geared toward “good drivers” who can show a financial need.

Applicants for the low-cost program must be at least 19 years old and meet “good driver,” income and other criteria. The value of insured vehicles cannot exceed $20,000, officials said.

The state-backed auto insurance program is slated to expire Jan 1. But consumer advocates and lawmakers hope it is extended through 2016.

“It needs to stay around because you have so many people who are struggling financially right now and who want to stay insured,” said Douglas Heller, executive director of Santa Monica-based Consumer Watchdog.

“Especially if they're trying to get job interviews or hold on to a new job. Some people can't afford auto insurance except for this bare-bones policy, which is really a lifeline for people who might otherwise be stuck at home or driving illegally.”

The low-cost auto insurance program has covered more than $8 million in injuries, property damage and medical bills associated with accidents involving program policyholders, officials said.

“Low-income drivers with good driving records deserve the chance to obtain affordable auto insurance,” said Assemblyman Dave Jones, a Sacramento Democrat who in February introduced AB 1597, which would extend the program through 2016.

Heller said the bill to extend the low-cost insurance program has bipartisan support, and he hopes the governor will not veto it as he did last year.

“There's no better reason to sign it than the success in the Inland Empire and other parts of the state that have been devastated by the economy,” Heller said.