When the Only Offer Is the Assigned Risk Plan
Most drivers never hear of the assigned risk plan, and the ones who do usually hear about it in a hurry. Here is what it is, how an offer through it compares with an offer from the open market, and how to make sure you only use it when you genuinely need to.
What the plan is
Insurance Code 11620 requires the Insurance Commissioner to approve a plan that shares out, among all insurers admitted to write liability insurance, the applicants for auto bodily injury and property damage liability who are entitled to that insurance in good faith but cannot buy it through ordinary methods. Every such insurer must subscribe and take part. The Department of Insurance calls it the California Automobile Assigned Risk Plan, or CAARP. The state's Low Cost Automobile Insurance Program also runs within it (Insurance Code 11629.7).
The certificate you will be asked to sign
An application through the plan comes with a certificate of eligibility (Insurance Code 11624.08). It states whether you meet California's Good Driver criteria and, if you do, which insurer and which representative turned you down. You sign it under penalty of perjury, and the agent or broker signs that they reviewed it for completeness.
That second question is there for a reason. California requires insurers to write a Good Driver Discount policy for a driver who qualifies, regardless of their underwriting guidelines (Insurance Code 1861.02). A qualifying Good Driver being sent to the plan is a flag worth raising, not a routine step.
Plan versus open market
| Assigned risk plan | Open (voluntary) market | |
|---|---|---|
| Who it is for | Drivers entitled to liability cover who cannot get it through ordinary methods | Everyone else, including non-standard carriers built for difficult records |
| How the company is chosen | Applicants are apportioned among participating insurers | You choose among the companies that will write you |
| What eligibility can weigh | The plan's standards may consider criminal convictions, license suspensions or revocations, accident record, fitness to drive, and the condition or use of the car (Insurance Code 11624) | Each company's filed rating plan and underwriting rules |
| How prices are set | Plan rates must not be excessive, inadequate or unfairly discriminatory, and must be actuarially sound so the plan is not subsidised | Each company's approved rates |
| Other coverages | The statute addresses liability; ask what else is available through the plan | Varies by insurance company |
Check these before accepting a plan placement
- Were non-standard carriers quoted? Several companies specialise in records that preferred carriers decline. A single decline from a preferred carrier is not the market.
- Do you meet the Good Driver criteria? Licensed three years, no more than one violation point, no more than one traffic-school dismissal, no at-fault injury accident in three years, no DUI conviction in ten (Insurance Code 1861.025).
- Is your DMV record right? Order your own copy and look for convictions or collisions that are not yours.
- Is your household income low enough for the Low Cost program? It has its own income and record limits and is worth checking separately.
Comparing a plan offer with an open-market offer
If you have both, compare them exactly as you would any two quotes: the same liability limits, the same uninsured motorist decision, the total cost for the term, the payment structure, and who services the policy. Write the market next to each price so you remember which is which.
Planning the way out
The things that put a driver in the plan expire. The DMV reports most traffic convictions for three years from the violation date, most two-point violations and DUI convictions for ten, and collisions for three. Put the dates in your calendar and re-shop as each one passes, because the open market reopens gradually, not all at once. If you are unsure which market you belong in today, send your details through our quote form and we will check the open market before anything else.
Where this comes from
- California Insurance Code section 11620 (the assigned risk plan)
- California Insurance Code section 11624 (what the plan must contain)
- California Insurance Code section 11624.08 (certificate of eligibility)
- California Insurance Code section 1861.02 (rating factors, take-all-comers, prior coverage)
- California DMV — Request your driver's record (what it shows, how long)
Get this quoted for your situation
Free quotes from multiple carriers, prepared by a licensed California agent. Two minutes, no obligation.
Get My Free QuoteMore of what callers ask
Can a Good Driver be placed in the assigned risk plan?
It should not normally happen. Insurers must write qualifying Good Drivers, and the plan's certificate asks which insurer turned a Good Driver down, so raise it if you qualify and were declined.
Is the Low Cost program the same as the assigned risk plan?
The Low Cost Automobile Insurance Program operates within the assigned risk plan, but it has its own income and driving-record rules and its own coverage. Check eligibility for it separately.
Does the plan only provide liability coverage?
The statute is written around bodily injury and property damage liability. Ask the agent handling the application exactly which coverages are available and at what limits.
How long do I have to stay in the plan?
There is no fixed stay. Re-check the open market as violations and collisions age off your record, and especially once you meet the Good Driver criteria again.