California Governor Vetoes Low Cost Insurance Extension
Consumer advocacy group Consumer Watchdog has reported that California Governor Arnold Schwarzenegger vetoed legislation to extend his state's Low Cost Auto Insurance program for low-income families, despite the fact that the bill - AB 725 - had bipartisan support from the California State Assembly.
The program in question offers basic auto liability insurance to low-income residents of California, an incredibly important proposition in a time of 12% unemployment. The low-cost insurance program provides insurance to good drivers for roughly $350/year and is not funded by taxpayer money. Since the program's inception as a pilot in 2000, through September of this year, almost 50,000 low-cost policies have been purchased, with up to 96% of them having been previously uninsured.
The AB 725 bill was co-authored by Assemblywoman Norma Torres, and would have extended the program through 2015, but with the veto, it will end at the end of 2010, instead.
In a press release, Consumer Watchdog executive director Doug Heller said, "This veto is out of touch with the real economy that many Californians are facing. Why would a program that has allowed nearly 50,000 Californians to buy auto insurance instead of driving uninsured and doesn't cost the taxpayers a dime be on the Governor's chopping block? It's not just low-income families who benefit from this program but all the people who have had their claims paid because another driver was carrying this policy."
According to the program's data, since 2006, Low Cost Auto Insurance policies have paid over $8 million in claims to drivers involved in collisions with policyholders. Since the majority of these clients were previously uninsured, if the low cost program didn't exist, those claims would all have been paid by either drivers holding conventional insurance, eating into their uninsured motorist coverage, or by the public health system.
