CAARP Introduction, Part III: CA Low Cost Auto Ins. Program


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Assignment Notices, Returns, and Rejections

Assignment Notices

Once an application is processed and assigned to an insurance company, notices are sent to both the insured and producer.

The insured's notice will tell them what company they were assigned to, including the company's address, phone number, and the date the policy went into effect. This notice is good for 45 days as proof of insurance. Within 30 days from the date the assigned company receives the application from CAARP, they must issue a policy.

The producer's notice will provide the same information as the insured's, but it will also notify the producer if there are any violations on the application. It is important to take note of any violations or any effective date changes.

Returned Applications

If the LCA Program application is missing required information it will be returned to the producer and a copy of the returned letter will go to the applicant. The producer has 10 working days to make the necessary corrections on the application and return it to CAARP in order to get their requested effective date.

The LCA Program application requirements are:

Applicant's Name
Applicant's residence address
Applicant's mailing address if different than resident address
Applicant's occupation (If the applicant is unemployed or retired, indicate that on the application. Do not leave occupation blank.)
Applicant's Employer name and address, if any.
Vehicle year, make, model, vehicle identification number and the value of the vehicle at the time of the application for insurance
State registered and registered owner's name
Garaging address if vehicle not garaged at residence
Total policy premium amounts for coverages and applicable surcharges 25% surcharge for unmarried male 19-24 years of age
The gross deposit amount submitted
Selection of payment plan option
California driver's license for all drivers in the household and license number of any driver's license issued by another state within the last 12 months, if any
Indicate years licensed of all drivers in the household, and if less than three years indicate date licensed was first issued
Indicate the occupation and annual income for each individual in the household, if applicable.
Indicate individuals in the household who do not drive or are not licensed due to licensed suspension or revocation.
Indicate relationship to applicant, birth date and gender of all licensed drivers in the household
Marital status, including name of spouse or registered domestic partner if not listed as an additional driver
Indicate whether or not a Financial Responsibility filing with the Department of Motor Vehicles is required
Name of last automobile insurer, policy number, termination date, and reason for termination, if available
Indicate whether there is a policy currently in effect for the vehicle to be insured
Indicate if there are any other vehicles owned by household members.
Provide details of all motor vehicle convictions and accidents in the past three years involving the applicant and anyone who operates the applicant's vehicle
The disclosure section of the application must contain the signature of the applicant or insured, including the date and time signed.

Applications will be returned if proof of income, copies of drivers' licenses, vehicle registration or other acceptable proof of vehicle ownership are not submitted with the completed application.

Rejected Applications

If an application for the LCA Program is submitted and the producer has indicated that the driver has not been licensed continuously for the past three years, the household income is more than 250%, or the vehicle value is more than $20,000, the application will be rejected. No applications should be submitted if the applicant does not meet all the Program's eligibility requirements.

If the producer does not use EASi to pre-screen an applicant's eligibility, the applicant may be rejected if when running the applicant's motor vehicle report it is discovered that the applicant is not a "good driver" as defined by the California Insurance Code.

If the applicant is eligible but any driver listed on the application is found to be not eligible, the application will still be processed, however the ineligible operator will be considered automatically excluded from coverage. Producers should ensure that the applicant is aware of the Program's exclusion of ineligible operators.

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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation.
The authors, LunchTimeCE, Inc. and AIPSO, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.