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California Low Cost Automobile
Table of Contents
Insurance Program
Report to the Legislature and Consumer
Education and Outreach Plan
Introduction.......................................................................................
2
Program and Policy Overview............................................................
3
Outreach Funding Source..................................................................
5
2004 – The Year in Review....................................................................
6
Performance Measures and Statistics................................................
16
Commissioner’s Determination of Success........................................
18
2005 Outreach Plan Summary...........................................................
20
Conclusion..........................................................................................
27
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
1
Introduction
The California Low Cost Automobile Insurance (CLCA) pilot program was enacted in
1999 (SB 171 Escutia, SB 527 Speier) to create an affordable insurance option for low-
income, good drivers in Los Angeles County and the City and County of San Francisco
to comply with California’s nancial responsibility law.
Legislative modication and enhancement of the program occurred in 2002, with the
enactment of SB 1427 (Escutia/Speier). Among other things, the bill established the
requirement for an annual report to the Senate and Assembly Committees on Insurance
detailing the Insurance Commissioner’s plan to inform the public about the availability
of the CLCA pilot program. In 2004, SB 1500 (Speier), added additional requirements for
the Commissioner to report on the success of the program, based on specied criteria.
Insurance Commissioner Garamendi shares the Legislature’s commitment to reduce the
number of uninsured drivers on California’s roads and to make affordable insurance
available to all consumers. As such, the Commissioner has made the California Low
Cost Automobile Insurance program a key component of his Emerging Communities
Initiative. This initiative is a series of California Department of Insurance programs and
activities that focus on improving access to and availability of insurance services in low-
income communities.
In January 2004, Commissioner Garamendi reorganized the California Department of
Insurance to focus resources and expertise on the Emerging Communities Initiative, with
a critical focus on the California Low Cost Automobile Insurance program.
The report that follows includes the Commissioner’s assessment of the success of the
program, details the activities and accomplishments of the past year, recommends and
proposes solutions to improve the program and reduce barriers to successful growth of
the program, and outlines the 2005 CLCA Outreach Plan.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
2
Program and Policy Overview
The CLCA program creates an affordable auto insurance option for low-income, good
drivers in Los Angeles County and the City and County of San Francisco.
The California Automobile Assigned Risk Plan (CAARP) administers the CLCA
program. CAARP assigns CLCA applications to auto insurers based on each
insurer’s share of the California voluntary auto insurance market. Only producers
(agents/brokers) certied by CAARP are authorized to submit program applications.
Currently, there are approximately 8,500 producers in Los Angeles and San Francisco
counties that are certied by CAARP.
Policy Features
The basic CLCA liability policy, as prescribed by state law, is $10,000/20,000/3,000;
providing up to $10,000 for bodily injury or death per person in an accident, a
maximum of $20,000 for bodily injury or death per accident, and up to $3,000
property damage for each accident.
The annual base premium rate for a CLCA liability policy is currently $347 in Los
Angeles County and $314 in the City and County of San Francisco. There is a 25
percent premium surcharge for unmarried male drivers ages 19 through 24. Several
installment payment options are available, with a down payment as low as 15
percent of the total cost.
Optional rst-party coverage is available at additional cost. These optional coverages
include $1,000 medical payments coverage and uninsured motorist bodily injury
coverage of $10,000/$20,000. Currently premiums for optional coverage are set at:
• Medical payments coverage: $26 in Los Angeles and $24 in San Francisco
• Uninsured motorist coverage: $64 in Los Angeles and $39 in San Francisco
Eligibility Requirements
By statute, the applicant’s annual household income may not exceed 250 percent of
the federal poverty level. Currently, the annual gross income threshold is $23,275
for a one-person household and $47,125 for a four-person household.
Applicants must be at least 19 years of age and a resident of Los Angeles County or
San Francisco City and County.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
3
Additional eligibility criteria include:
• The applicant must be a “good driver,” dened as having no more than one at-fault
property damage accident, or no more than one “point” for a moving violation,
but not both, and no at-fault accident involving bodily injury or death in the
past three years; and no felony or misdemeanor convictions for a violation of the
California Vehicle Code
• The value of the vehicle to be insured shall not exceed $12,000
• The applicant must have been continuously licensed to drive for the previous three
years. In meeting the three year standard, up to 18 months of foreign licensure is
acceptable, providing the applicant was licensed to drive in the US or Canada for
the preceding 18 months
• A CLCA policyholder shall not purchase a non-CLCA liability policy for any vehicle
in the household
• Each household is limited to a maximum of two CLCA policies
3’ x 10’ Banner
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
4
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The original 1999 legislation that created the CLCA program did not address the need for,
nor provide funding for, consumer education and outreach. In 2000, the Department
initiated a consumer education and awareness campaign to inform consumers of the
availability of the program.
The Department has used a portion of its SB 940 (Speier) funds to pay for CLCA outreach
efforts. SB 940 (Speier) requires insurers to pay an annual fee of 30 cents per vehicle
insured in California to fund consumer services related to automobile insurance, ten
cents of which may be used for consumer education.
The Department has not requested, nor has the Legislature appropriated, funds
specically for the CLCA program. SB 1427 (Escutia/Speier), as amended by SB 1500
(Speier), requires that the Commissioner submit an outreach plan to the Senate and
Assembly Committees on Insurance and Transportation to be eligible for funding
through the budget process.
In scal year 2004-05, the Department allocated $655,000 of SB 940 (Speier) funds for
CLCA program outreach activities. Given the challenge of the current economic and
scal climate, the Department is not expecting, nor requesting, additional funding
through the budget process at this time. The Department proposes to use $700,000 of
SB 940 (Speier) funds to pay for outreach activities in FY 2005-06. However, it must be
noted that SB 940 (Speier) is slated to sunset on January 1, 2007, thus eliminating the
only source of funding for outreach for the CLCA program. The Department is proposing
legislation this session to eliminate the sunset.
Newspaper advertisement
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
5
2004 – The Year in Review
Commissioner Garamendi’s January 2004 reorganization of the Department created
the new Community Relations Branch
to focus departmental resources and expertise
on the CLCA program, as well as other components of the Emerging Communities
Initiative. The new Community Relations Branch immediately undertook an
extensive assessment of the CLCA program.
Program Assessment
In the rst four months of 2004, the Department conducted a detailed review of all
outreach activities since the inception of the program, an analysis of program statistics
and an evaluation of previously conducted consumer studies. Additionally, input was
solicited from the program administrator, the California Automobile Assigned Risk
Plan. The purpose of this review was to assess the effectiveness of outreach activities
and to evaluate the various strengths and weaknesses of the program.
Components of the assessment included:
• Review of outreach methodologies used
• Analysis of program participation and utilization
• Evaluation of reasons for applicant ineligibility
• Review of consumer inquiries by zip code
• Review of advertisements and public service announcements
• Analysis of consumer research studies
To gain insight into the successes and failures of the program, a series of meetings
were convened with insurance producers experienced in selling CLCA insurance and
with producers who serve low-income and underserved communities. More than 50
producers participated in these meetings. Participating producers were ethnically and
geographically diverse, and included independent agents as well as larger agencies.
Finally, to ensure the assessment was comprehensive, a series of meetings were
held with community-based organizations, faith-based organizations, and labor
organizations, whose primary mission or services are directed at low-income
communities and individuals. These meetings solicited feedback about the program
and ideas about methods to efciently and cost-effectively market the program.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
6
Assessment Findings
The assessment revealed that previous efforts to promote the program had not
been successful. Signicant barriers to the success of the program were identied,
including several inhibitors to potentially eligible individuals qualifying for the
program and numerous operational obstacles that undermine the willingness of
insurance producers to promote the program and write CLCA policies.
Among the key ndings of the assessment was that from the inception of the program
through December 31, 2003, only 9,692 policies had been assigned. Materials that
had been developed to promote the program lacked a clear and concise message and
did not reect the cultural awareness and sensitivity necessary to successfully market
the program in low-income minority communities.
Outreach Plan Development and Implementation
Based on the assessment ndings, a new comprehensive grassroots outreach
campaign to promote the CLCA program was developed. The campaign focuses on
specically targeting eligible constituencies, in volume, through community-based
organizations, faith-based organizations, labor organizations and other governmental
agencies serving low-income communities. It was determined that outreach
conducted through groups and organizations that serve low-income communities
would yield a larger volume of program eligible consumers than through direct
individual outreach efforts.
Implementation of the outreach plan was scheduled to begin in Los Angeles County
in August 2004 and the City and County of San Francisco in January 2005.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
7
Partnership Development
Meetings were convened with dozens of organizations to create outreach partnerships
for the CLCA program. Plans were developed to promote the program through
townhall-style and informational meetings with these organizations, newsletter
advertisements and features, inserts in union-member’s paychecks and other low-
cost means of communication. The Department provided outreach materials for
distribution to the organizations’ members and constituents.
The following is a partial list of organizations included in partnership development
efforts:
Community-Based Organizations
• Alliance for Better Community
• Brotherhood Crusade
• EL RESCATE
• Mexican American Legal Defense and Education Fund
• Mexican American Opportunity Foundation
• Mothers In Action
• Pico Union Westlake Cluster Incorporated
• Salvadoran American Leadership and Educational Fund
• Southern Christian Leadership Conference – Los Angeles
Faith-Based Organizations
• Baptist Ministers Conference
• Clergy and Laity United for Economic Justice (CLUE)
• Crenshaw Christian Center
• First AME Church of Los Angeles
• United Methodist Church of Hollywood
• West Los Angeles Church of God and Christ
Labor Organizations
• Service Employees International Union – Local 99 (Classied School Employees)
• Service Employees International Union – Local 434B (Home Care Workers)
• Service Employees International Union – Local 1877 (Janitors, Security Guards)
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
8
Message and Material Development
Utilizing an existing contract the Department has with the rm of Ogilvy Public
Relations Worldwide for consumer outreach and education, key written and
graphic consumer messages were developed. Message development was based on
information obtained in the program assessment and in the various community and
producer meetings.
These messages were tested in focus groups composed of eligible, low-income,
uninsured drivers, including African Americans and Latinos. The focus groups were
convened in an effort to develop culturally sensitive and relevant consumer messages
and materials. The groups were specically designed to ensure
that all participants were actually eligible for the CLCA program
and were representative of targeted constituencies.
In addition to written messages, an array of graphic logos were
tested. The selected logo received an overwhelming positive
response from the group participants.
Additional testing was done to determine the best type of
spokespeople for promoting the program. Overwhelmingly,
participants preferred “ordinary people” to celebrities,
politicians, or law enforcement ofcials.
The focus groups revealed two key ndings:
1) every participant clearly understood that driving without insurance was a
violation of state law with signicant consequences; and,
2)
when informed about the availability and cost of CLCA insurance participants
demonstrated universal interest and an enthusiastic response.
As a result of participant reaction a simple two-sentence message was developed:
“Why risk driving without insurance when you can afford it?”
“You may be able to get insured for as little $347 per year!”
This message generated a strong and positive reaction both in English and when
translated into Spanish.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
9
Outreach materials were developed utilizing the newly tested message and graphics,
including informational brochures, postcards and palm cards.
Palm card
English-language brochure
Spanish-language brochure
Chinese-language brochure
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
10
Outreach Plan Launch
In August 2004, the Commissioner ofcially launched the Department’s new outreach
campaign, incorporating the various elements identied during the assessment,
message development and planning phases. The kick-off included press events and
stories featuring CLCA policyholders, producers committed to selling CLCA policies
and organizations representing low-income communities.
The press coverage generated a signicant spike in consumer interest, as evidenced
by a dramatic increase in inquiry calls to the CAARP hotline.
Building on the increased public awareness resulting from the press coverage,
Department efforts were directed at implementing partnership activities, as
previously described.
The Mexican American Opportunity Foundation became the rst partner organiza-
tion to host a townhall meeting showcasing the CLCA program and to make CLCA
materials available to their clients. Plans were developed to conduct similar events
over the course of the next year with other partner organizations.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
11
Governmental Agency Collaboration
Efforts to integrate the CLCA program with other governmental agencies serving low-
income communities were begun, focusing initially on the California Department of
Motor Vehicles, the Los Angeles County Department of Public Social Services, and
the Housing Authority City of Los Angeles. Initial activities included:
Department of Motor Vehicles
The DMV has placed CLCA materials in many of its ofces in Los Angeles and San
Francisco. Additionally, DMV staffs have been trained to refer inquiring consumers
to the CAARP hotline for further information on the program.
Los Angeles County Department of Public Social Service
A partnership was formed with LA-DPSS to coordinate the distribution of CLCA
outreach materials through their 42 district ofces. Department staff attended
LA-DPSS’s regional directors meeting, to educate district ofce directors on the
CLCA program and its benets for their clientele. Subsequently, the Department
was invited to attend regional meetings to train frontline DPSS staff on the CLCA
program, as well as to participate in monthly community information meetings.
Housing Authority City of Los Angeles
Department staff participated in quarterly tenant’s informational meetings,
providing tenants with informational material and an overview of the program. The
Housing Authority has invited the Department staff to participate in future outreach
opportunities.
Advertising Campaign: Community-based and Ethnic-specialty media
In an effort to cost-effectively reach the largest audience within targeted communities,
the Department selected to advertise in community-based and ethnic-specialty press.
These ads enable the Department to promote consumer awareness across a broad
spectrum of communities and to amplify outreach efforts.
With the assistance of Ogilvy Public Relations Worldwide, the Department placed ads
in the following publications, from September 2004 to December 2004:
• IN Los Angeles Magazine
• La Opinión
• LA Sentinel
• The Recycler
• Revista Adelante
To evaluate the effectiveness of advertisements, the Department reviews referral-
source statistics provided by CAARP each month.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
12
Community-Based and Ethnic-Speciality Media
Newspaper advertisement targeting specic audience
Bilingual newspaper advertisement
Bilingual newspaper advertisement
Bilingual newspaper advertisement
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
13
Community-Based and Ethnic-Speciality Media (continued)
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California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
14
Producer Outreach
The initial program assessment made clear that producer participation and
cooperation was vital to the success of the program. Continuing the outreach begun
in the assessment phase, meetings were held with a variety of producers serving low-
income communities, as well as with selected producer trade associations.
The purpose of these meetings was to raise producer awareness about the CLCA
program, to solicit feedback about their experiences with the CLCA program and
to solicit additional ideas on program marketing. A standardized needs assessment
questionnaire was created to gather producer input and feedback.
The producers emphasized that the lengthy application process and paperwork
burden, combined with the low commission rate, were serious disincentives to
producers who might otherwise sell and promote the CLCA program.
As a result of producer input, the Department committed to make changes to the
program designed to reduce barriers to producer participation.
Operational Improvements
Issues, problems and proposed solutions identied through producer meetings were
categorized by type of authority necessary for implementation.
Key issues that could be resolved without legislative or statutory changes centered
on the application process. The following operational changes were implemented in
November 2004:
•
On-line
On-line
application
application
– This change reduces the time required to complete the
application as well as the associated paperwork burden
•
On-line
On-line
binding
binding
authority
authority
– This function allows producers to obtain on-line
binding authority, a policy binding number and effective date, thereby providing
clear evidence of binding
•
On-line
On-line
DMV
DMV
driving
driving
record
record
veri
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cation
– Permits producers to immediately verify
whether or not an applicant meets the good driver standard, eliminating the
uncertainty of delayed verication of driver qualication
The Commissioner communicated with all CAARP certied producers in targeted
areas about the renewed focus on the CLCA program and the newly implemented
operational changes designed to reduce barriers to producer participation.
Legislation to eliminate barriers that require statutory changes was introduced in
December 2004 by Senator Martha Escutia (SB 20). This legislation is detailed in the
2005 outreach plan summary at the end of this document.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
15
Performance Measures and Statistics
The following data sets provide key performance statistics demonstrating the growth
of the program since inception. Rapid acceleration in growth is noted since the
August 2004 outreach campaign launch.
Program Performance Following August 2004 Outreach Campaign Kick-off
• Generated 8,792 new inquiries in ve months – compared to 5,743 in the previous
seven months
• Averaged 1,758 new inquiries per month – compared to an average of 820 per
month for the previous seven months
• Assigned 3,337 new applications
• Approved 83% of new applications received, compared to 77% in 2003
• Assigned applications in 84 additional low-income zip codes where no policies had
previously been assigned
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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Program Statistics since Inception
16,893 policies assigned
since program inception
• Over 9,000 policies currently
• Renewal rate approximately
2004 Calendar Year Program Statistics
• Generated 14,535 new inquiries
• Received 8,767 applications
• Assigned 7,202 policies
• Achieved a 27% increase in
policies assigned compared
to 2003 performance
• 85.4% of program policy as-
signments were for appli-
cants who were uninsured at
the time of application (see
Figure 1.)
• Generated 14,535 new inquiries
Figure 1.
Program Statistics since Inception
•
16,893 policies assigned
since program inception
through 12/31/04
• Over 9,000 policies currently
in force
• Renewal rate approximately
55%
•
84.1% of policyholder’s an-
nual income is less than
$20,000 (see Figure 2)
•
The greatest number of policyholders are in the 40-59 age group
• Fewer than 5% of policies sold are to unmarried males ages 19-25
• 36% of policyholders also purchase uninsured motorists coverage
• 19% purchase both uninsured motorists and medical payment coverage
Figure 2.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
17
Commissioner’s Determination of Success
The Commissioner has determined that the CLCA program was successful in meeting
each of the measurements of success specied in California Insurance Code section
11629.85, as amended by SB 1500 (Speier).
1 – Rates Were Sufcient to Meet Statutory Rate-Setting Standards
The Insurance Code species that rates shall be sufcient to cover losses and expenses
incurred by policies issued under the pilot programs. Rate-setting standards also
require that rates shall be set so as to result in no subsidy of the program or subsidy
of policyholders in one pilot program by policyholders in the other pilot program.
The program rates in 2004 generated sufcient premiums, based on the rate-setting
criteria.
In determining any adjustment to rates, the Commissioner held a public hearing
to consider a rate recommendation by CAARP, as required each year by statute.
In 2004, CAARP recommended maintaining all rates. The Commissioner carefully
considered CAARP’s recommendation and comments submitted during the public
hearing period, and the Department’s independent actuarial review of the loss and
expense data. As a result, the Commissioner adopted CAARP’s recommendation to
maintain rates in 2004, nding that the current rates and surcharge were adequate
and consistent with the rate-setting standards of California Insurance Code sections
11629.72(c) and 11629.92(c).
In January 2005, CAARP will submit an annual rate recommendation and updated
loss and expense data. As loss experience warrants, the Commissioner will make
necessary rate adjustments, consistent with the rate-setting standards and procedures,
to insure success of the program.
2 – The Program Served Underserved Communities
While the term “underserved communities” is not dened in statute, the Department
believes it is meeting this goal, as evidenced by the following:
•
CAARP statistics document 84.1% of policies issued in 2004 were issued to
applicants whose income was at or below $20,000 per year.
• Many zip codes with high concentrations of low-income consumers show dramatic
increases in policies assigned.
• The average number of policies assigned per month increased from 561 per month
in the ve months preceding the outreach campaign kick-off, to over 667 per
month following the kick-off in August 2004.
• The average number of policies assigned per month increased from 469 per month
in 2003 to 600 per month in 2004.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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3 – Reduced the Number of Uninsured Drivers
CAARP tracks the number of program applicants who were uninsured at the time of
application.
• CAARP’s 2004 report shows that 85.4% of program policies assigned were to
applicants that were uninsured at the time of application, therefore, in 2004, at
least 6,150 previously uninsured motorists are no longer uninsured
Status at Time of Application - Uninsured v. Insured
4 – Administrative Costs
The Department allocated approximately $655,000 of SB 940 (Speier) funds for FY
2004-05 CLCA outreach activities. Since the CLCA program is administered by
CAARP, administrative costs are reected in CAARP’s budget. These administrative
costs are detailed in a separate report to the legislature by CAARP
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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The California Low Cost Automobile Insurance Program 2005 Outreach Campaign
has been crafted to incorporate and expand upon the revised 2004 outreach plan,
which was initiated in August 2004.
The key objective of the plan during 2005 is to continue to raise consumer awareness
of the CLCA program and further increase the volume of program inquiries. This
will be accomplished through ongoing grassroots outreach activities, conducted in
partnership with various community-based organizations, faith-based organizations,
labor organizations and governmental agencies, including the Department of Motor
Vehicles and local social service agencies.
In addition, the program will expand its use of community-based and ethnic-
specialty press print advertising and implement a “public service announcement”
program, to maximize the use of limited SB 940 (Speier) funds, while reaching the
greatest number of uninsured drivers in low-income communities.
Outreach Program Goals
• Ensure sustained increases in inquiry volume, with resultant increased volume in
new policy issuance, through ongoing outreach efforts
• Eliminate barriers to participation by simplifying the program’s qualication
requirements and enrollment process
• Recommend appropriate modications to the program to enhance accessibility and
improve consumer and producer participation and satisfaction
• Broaden the geographic availability of the program, thereby decreasing the number
of uninsured motorists on the roads of California
San Francisco Component - Outreach Development and Implementation
(1) Kick-off media event in San Francisco
(2)
Implement grassroots outreach campaign, including:
• Prepare culturally sensitive and relevant materials for distribution, including
Chinese language materials
• Selectively identify and recruit individuals and organizations in the City and
County of San Francisco interested in partnering in the program outreach
effort
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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San Francisco Component - Outreach Development and Implementation (continued)
•
Community-based organizations and consumer groups:
-
Faith-based organizations
-
Labor organizations
-
Producers
-
Governmental agencies providing services to low-income communities
•
Utilize paid advertising and features in the newsletters or bulletins of participat-
ing organizations or groups
(3) Begin radiobroadcast of informational public service announcements in English
and Spanish in targeted media outlets and markets.
•
Utilize cable television shows that target ethnic and low-income communities
to promote the CLCA program
•
Promote the CLCA program through targeted print advertising in community-
based and ethnic-specialty press, i.e., African American, Spanish-language,
Asian Pacic Islander community, and LGBT community publications
Los Angeles Component - Outreach Program Expansion
Expand the 2004 Los Angeles grassroots campaign to additional organizations, groups
and partners in an effort to reach increasing numbers of uninsured low-income good
drivers.
(1)
Continue developing new program partners and expand partnerships to include:
•
Colleges and adult education:
-
Community colleges
-
California State Universities
-
University of California
-
Los Angeles Unied School District Adult Education Programs
•
Retail or “boutique” marketing opportunities
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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Los Angeles Component - Outreach Program Expansion (continued)
•
Government programs focused on low income constituents
-
CalWorks
-
Lifeline (telephone)
-
LIHEAP (energy)
-
California Healthy Families
•
Legislators and local elected ofcials
•
Governmental agencies
-
DMV
-
Board of Equalization
-
Los Angles County Department of Public Social Services
-
Housing Authority City of Los Angeles
•
Expand current partnerships with community-based organizations, faith-based
organizations, and labor organizations to include informational meetings,
townhall meetings, newsletter features, newsletter advertising and mailings
•
Develop CAARP certied producer communiqués providing updates on
administrative changes, success stories, and information on upcoming events
to solicit participation
(2)
Expand media campaign, to include:
•
Begin broadcast of informational public service announcements in English and
Spanish in targeted media outlets and markets
•
Utilize cable television shows that target ethnic and low-income communities
to promote the CLCA program
•
Promote the CLCA program through targeted print advertising in community
and specialty press, i.e., African American, Spanish-language and Asian Pacic
Islander community publications and other publications targeting low-income
communities
•
Conduct specialty media roundtables
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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Producer Outreach Component
Promote increased participation by and collaboration with CAARP certied producers:
•
Contact CAARP certied producers with a record of participation in the
program to solicit their involvement in community information events
•
Attend producer trade organization meetings to disseminate information
regarding the changes implemented and to solicit participation in outreach
efforts
•
Meet with newly certied CAARP producers to inform them of outreach
opportunities
Evaluation Component
•
Assess progress through weekly and monthly performance reports and revise
the plan as needed
• Evaluate effectiveness of media campaign and revise as needed
• Identify additional opportunities to eliminate barriers to eligibility, simplify
the application process and improve the CLCA program
• Consider additional regulatory and statutory changes to improve and enhance
the program
Tracking Impact of Outreach Efforts
CAARP compiles the following program data reports which track program results and
correlates performance with outreach activities:
• Weekly calls generated by a particular outreach method
•
Monthly reports on the number of callers “qualied” to apply for the program
• Monthly number of applications assigned, returned, or rejected
• Monthly reports on the number of calls by referral source
• Monthly number of calls by zip code
• Quarterly reports on the number of policy renewals and cancellations
• Monthly reports on the percentage of previously uninsured drivers assigned
and other demographic detail
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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Statutory Revision Component (Proposed Statutory Changes)
Based on information gleaned from the CLCA program assessment and input from
producers, a legislative proposal was developed by the Department and introduced
by Senator Martha Escutia (SB 20) in December 2004.
This legislation modies certain qualication requirements, eliminates the program
sunset date and expands the geographic availability of the program.
Key components of proposed legislation (SB 20):
Eliminate Program Sunset Date
Eliminate Program Sunset Date
The CLCA program is currently scheduled to sunset on January 1, 2007. The
program has proved that it can pay for itself, and does not require subsidy from
other policyholders, the government, or insurance companies. The circumstances
that created the need for this program have not changed. Financial responsibility
laws are still in effect, the state still has a large population of uninsured drivers, and
our low-income consumers are still unable to afford standard insurance premiums.
Elimination of the planned sunset will continue to make this much-needed program
available to California’s low-income consumers.
Expand Program to Additional Counties
Expand Program to Additional Counties
The need to expand the CLCA program into additional targeted counties is quantied
by three indicators: number of inquiries to CAARP, uninsured vehicle rate, and
income data.
The data analyzed indicates that the following six counties have a demonstrated
need for the CLCA program. Each of the recommended Counties includes low-
income communities, with a high percentage of both uninsured vehicles and
population living below the poverty level, with a demonstrated interest in access to
the program.
County
*Number of
Percentage
**Percentage
Uninsured Vehicles
Rate of
of Population
Uninsured
Below Poverty
Motorists
Motorists
Orange
200,056
10.29
10.3
San Bernardino
105,482
10.38
15.8
Alameda
121,434
12.27
11.0
Riverside
87,097
9.37
14.2
San Diego
165,016
8.72
12.4
Fresno
77,933
17.27
22.9
*
Source: The California Department of Insurance website – Estimated Rate of Uninsured MotoristReport 2000.
**
This is the percentage of the population below the federal poverty level. Income eligibility for the CLCA program is 250 percent
of the Federal Poverty Level. Source: 2000 Federal Census.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
24
Eliminate Maximum Number of Policies per Household
Eliminate Maximum Number of Policies per Household
Currently, only two CLCA policies are permitted per household. Many low-income
California households are multi-generational, often consisting of three or more
generations. These households may have more than two vehicles, making them
ineligible for the program. The household policy limit has been identied as a major
cause of ineligibility for the program through CAARP’s inquiry screening process.
Eliminate Maximum Vehicle Value
Existing law sets the vehicle value threshold for program eligibility at $12,000.
Because a CLCA policy is liability only and does not provide collision coverage,
the vehicle value is not relevant and should be eliminated. Vehicle value has been
identied as a major cause of ineligibility for the program through CAARP’s inquiry
screening process.
Newspaper advertisement
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
25
FY 2005-2006 CLCA Outreach Budget
Elements
Cost
Partnership Outreach
Using partnerships with community-based organizations, faith-
based organizations, and labor organizations to reach potential
participants in CLCA consumer education and outreach activities.
• Purchasing ads in organizational bulletins and newsletters
• Postage, mail processing, and bulk distribution of materials
• CLCA application technical assistance
• Project management and stafng
$230,000
Outreach Materials (Including Ogilvy & EDD)
Develop integrated CLCA educational materials: yers, postcards,
posters, inserts, brochures, and press kits.
• Graphic design, layout and copywriting
• Design of materials to be developed for use in outreach efforts
with organizations and governmental agencies
• Update and rene CLCA targeted mailing list
• Printing
• Project management
$210,000
Co
mmunity Events
• Attend and/or arrange conferences, workshops, community
events, and education fairs
• Conduct CLCA presentations, workshops, or seminars
• Related travel expenses
$25,000
CLCA Internet Web Page
• Project management
$10,000
Media – Print, Radio and Public Service Announcements
• Creative and production
• Air time and ad space purchase
• Project management
$200,000
Miscellaneous Outreach Activities
$25,000
Total
$700,000
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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Conclusion
The Commissioner is committed to the success of the California Low Cost
Automobile Insurance Program and believes the activities implemented in 2004
show great promise for future success and for a signicant reduction in the number
of uninsured drivers on the roads of Los Angeles County and the City and County of
San Francisco.
Through the elements described in our 2005 Outreach Plan, the Department expects
to further raise consumer awareness and increase the volume of program inquiries
and CLCA insurance policies assigned.
The California Department of Insurance is committed to making the California Low
Cost Automobile Insurance program the best of its kind in the nation.
California Low Cost Automobile Insurance Program
Report to the Legislature and Consumer Education and Outreach Plan
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