This informational page is a resource for auto insurance agents who are certified through California’s Automobile Assigned Risk Program (CAARP) to sell California’s Low Cost Auto (CLCA) Insurance policies or for agents who wish to learn more about this state-sponsored program.
In order for licensed insurance agents and brokers to become certified to sell CLCA policies, they must fill out a producer certification application and complete four one-hour CAARP certification courses. Get your application here and start your courses today. Once you’ve completed your CAARP certification, you can opt-in to receive CLCA business leads through the Lead Accepting Producers Program. If you wish to become a lead accepting producer for CLCA, download your LAP form here.
The California Automobile Assigned Risk Plan (CAARP) was created in 1947 by the state legislature with the essential purpose to provide automobile liability insurance to those who “in good faith” are entitled to but are unable to procure such insurance through ordinary methods. The statute indicates a legislative intent to encourage drivers to seek insurance in the voluntary market using the assigned risk plan only as a last resort.
The Assigned Risk Program is a processing center by which people who have trouble buying automobile insurance are put in touch with an insurance company which will insure them. From then on, the person and the certified producer communicate with the insurance company as if they had chosen the company. As part of the initial processing, the Plan makes financial responsibility filings with the Department of Motor Vehicles if requested on the application. If the insured or producer is having difficulty in getting the attention of the insurance company, we attempt to assist. When appropriate we will also assist insurance companies in communicating with insured and certified producers.
The assigned risk plan is not an insurance company. Its rates are recommended by CAARP’s Advisory Committee and approved by the Department of Insurance. It is the Advisory Committee’s obligation to propose rates and run the Plan on a self-sustaining basis. The financial backing necessary to assume the risk comes from companies who are required by law to participate in the plan.
Applicants to the plan are divided among these insurance companies in proportion to the amount of automobile insurance business each company writes in the state. For example, a company which insures 10 percent of the cars in California’s regular market insures 10 percent of the applicants to the assigned risk plan.
Only certified producers can submit applications to the California Automobile Assigned Risk Plan. Any agent/broker with a California fire & casualty license can become a certified producer with CAARP. Agents/brokers must complete an application for CAARP certification and include a copy of their current California fire & casualty license.