Auto Insurance Market in California Essay

            The state of California has issued a mandatory automobile insurance subscription for all drivers in the area - Auto Insurance Market in California Essay introduction. This is to ensure that all drivers within the state are covered through this insurance policy. Even so, there are several drivers in the state who has not acquired insurances yet due to the high cost the state imposes on automobile insurance programs. Since then, the automobile insurance market in California has exerted great efforts to reach the low classes of society and the uninsured who cannot afford to subscribe for an automobile insurance. The state has implemented several affordable automobile insurance programs. The program was first approved and implemented in 2000 in selected cities, and insurance companies all over the state were forced follow the guidelines of these programs. Last year, the programs were made available for all areas in California. (IINC, 2008)

            The Low-Cost Auto Insurance Program is one example lobbied by legislatives body to make insurances payable to anyone, under some rules and restrictions. The insurance amounts to merely $30 a month. However, this cost is only allowed for drivers with driving records, a certain amount of salary, and a car that is $20,000 and below. (IINC, 2008)

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            The regulations of the clauses included in automobile insurance programs is deemed necessary in order to make low-cost and affordable insurance programs, such as the “No Pay, No Play” law. The restrictions included in this particular law was the regulation of the rights that shall be claimed and carried out by automobile insurance holders, as well as the conditions under which they are granted insurance credits. This was implemented in California before the Low-Cost Auto Insurance Program aforementioned. (Carroll & Abrahamse, 1998)

            Another program, implemented by the state of California, includes insurance subscriptions granted to high-risk drivers. California considers focusing on high-risk drivers, or drivers who had past experiences with driving under the influence, speeding, and other traffic and road violations. This type of insurance, earns high-risk drivers the chance to establish an insurance plan that is affordable and less costly that other insurances.

            The mandate of the state of California for all drivers to avail of insurance plans is a way for them to impact financial and social responsibility, and also security and well being. Nowadays, California proved that good insurance plans do not always come with a high price tag, due to the programs and insurance plans that they released for the low-income classes of society.


Carroll, S. J. & Abrahamse, A. F. (1998). “The Effects of a No-Pay/No-Play Plan on the Costs of

Auto Insurance in Texas.” Retrieved April 19, 2008, from RAND. Website:

IINC. (2008). “California’s Low Cost Auto Insurance Program.” Retrieved April 19, 2008, from

Insurance Information Network of California. Website:


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