—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.
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
, 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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