All About the California Automobile Assigned Risk Plan (CAARP)

The California Automobile Assigned Risk Plan, or CAARP, can help if your income or risk level prevents you from purchasing car insurance.
Written by Mindy Hood
The California Automobile Assigned Risk Plan, or CAARP, helps low-income or at-risk drivers get the
liability coverage
they need.
  • CAARP is a low-cost automobile insurance program that helps drivers who can’t afford a traditional
    California car insurance
    policy get liability coverage. 
  • CAARP can also help high-risk drivers meet minimum coverage requirements.
  • To qualify for CAARP, you’ll need to be at least 19 years old, have a valid CA driver’s license, and own a vehicle worth $25,000 or less.

What is the California Automobile Assigned Risk Plan (CAARP)?

CAARP is essentially a safety net for drivers who "in good faith" cannot procure automobile insurance coverage through the usual means. 
It provides liability insurance—including
bodily injury liability
and
property damage liability
—for drivers who cannot afford traditional insurance plans as a way to encourage and revitalize drivers so they can eventually get regular insurance again. 
You might also be able to get uninsured motorist coverage or medical payments coverage for an additional cost.
California’s state legislature established CAARP in 1947. Since then, the way CAARP operates, associated regulations, and even applicant qualifications have changed to accommodate cultural shifts and changing norms.
CAARP operates by delegating work: Drivers who contact CAARP for help with insurance are processed and assigned to an insurance agent. The agent then finds an insurance company that will provide coverage for the driver.
The insurance company communicates with CAARP applicants the same way it communicates with other insured drivers. California law requires insurance companies to participate in the program. They must abide by rates set by CAARP’s advisory committee and the Department of Insurance for all drivers under the Assigned Risk Plan.
Insurance companies are only required to carry a driver with the Assigned Risk Plan for three years. If a driver needs the Assigned Risk Plan for more than three years, the insurance agent they were assigned to must create a new application. 
A new insurance company is then assigned the responsibility of insuring the driver under the Plan.

Who qualifies for CAARP?

CAARP is for low-income and
high-risk drivers
who aren’t able to find traditional car insurance through ordinary methods. 
What’s considered a high risk varies between insurance companies, but some factors make you a greater overall risk:
  • You have under three years’ driving experience
  • You are under the age of 25
  • You have multiple speeding tickets on your driving record
If you are seeking CAARP as a low-income driver, assistance is provided through
California’s Low Cost Auto Insurance Program (CLA)
. You can go straight to the AIPSO website and
fill out an application
to determine your eligibility. 
High-risk drivers will have to call in and speak with a representative directly. In either case, there are several criteria you must meet before qualifying for CAARP:
  • Have a valid California driver’s license
  • Own a vehicle valued at no more than $25,000
  • Be at least 19 years of age
Many drivers meet the three criteria listed above but have no need for CAARP. The application process will examine your needs based on either your income or your risk level. The only way to know for sure whether you qualify for CAARP is to begin an official application.

What CAARP doesn’t do

CAARP is not an insurance company: Although it’s paid for by the insurance industry, it is managed by
AIPSO
, which is a non-profit organization specifically designed to support and regulate CAARP. You can think of it as a support agency rather than an insurance provider.
As a government program, CAARP is responsible for maintaining sustainability. The insurance industry pays for government employees working in AIPSO, and the same industry bears the cost of at-risk drivers. 
The more cars an insurance company insures in the state of California, the more they are expected to contribute to CAARP.
Unlike traditional insurance programs, CAARP only has two plans:
  • One covering private vehicles
  • One covering commercial automobiles
Minimal coverage: Since these plans have no strict guidelines, they rarely offer the kinds of extra benefits and services regular insurance plans do. They are almost always strictly limited to automobile liability insurance and set at minimum coverage limits.
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