Schwarzenegger axes low-cost auto insurance program as state & feds fleece impoverished public
By Martin Hill
April 7, 2010

California's low-cost auto insurance program, which offers affordable automobile liability insurance to Californians who meet income eligibility requirements, is set to be axed in 2011, thanks to a a veto by governor Arnold Schwarzenegger.  The low-cost program, which is largely unknown by residents, is set to expire Jan. 1, 2011 but had been extended by the legislature via AB 725. It was terminated by the governor, however,  who said the  'effectiveness of this program is questionable given the number of policies in effect and low participation rate amongst the uninsured'.

Like many states, California enacted mandatory auto insurance laws some years ago. Yet many Californians are having trouble just making ends meet. Unemployment in California may average 12 per cent in 2010. California has the second highest 'share of multigenerational households' in the nation ('boomerang kids', adults moving back home with their elderly parents because of economic problems). Even hotel foreclosures are up 27 percent as a result of unemployment and reduced business travel.

Police, meanwhile, are admittedly getting more aggressive in issuing traffic tickets during the recession. A USA Today article recently pointed this out, including statistics of how local governments always increase traffic citations whenever revenue decreases: 

"A study published last year in the Journal of Law and Economics found that police issue more traffic citations during recessions. From 1990 to 2003, counties in North Carolina issued significantly more tickets in the year following a decline in general tax revenue. Researchers from the Federal Reserve Bank of St. Louis and the University of Arkansas-Little Rock found that a 10% decrease in revenue growth caused a 6.4% increase the following year in the growth rate of traffic tickets."

Receiving more traffic tickets, if convicted of the offense, will raise drivers' rates even further. If motorists don't have insurance, they don't even have to be pulled over in order for the state to find out. California now has mandatory electronic reporting, with auto insurance companies forced to report to the state electronically (CVC §16058) whenever a drivers' liability insurance lapses. The state can then  suspend the vehicles's registration, (CVC §4000.38) even if the fees have been paid, impound the vehicle from the owner, and sell it. This program began in 2006, and the DMV website points out that "Law enforcement and court personnel have electronic access to insurance status on DMV records".

Despite the fact that officers have access to motorists' insurance information, they must still provide a copy of it upon request, or they have violated yet another law, CVC 16028(a): "every person who drives a motor vehicle upon a highway shall provide evidence of financial responsibility for the vehicle that is in effect at the time the demand is made",

The previous article ">How compulsory auto insurance rode the slippery slope to "government health care" outlines how compulsory insurance laws do not work, causes rates to increase, and how Obama used the widespread acceptance of such laws at the state level as an excuse to justify further government intrusion into our lives.

Schwarzenneger and his wife, meanwhile, both  ignore the plethora of laws he signed into law, not to mention  his tax lien (since taken care of) and shady political donation he made to himself