The correct answer is that households with income not exceeding 250% of the federal poverty level are eligible for the low-cost auto insurance program in California. This program is designed to assist low-income individuals and families maintain financial access to automobile insurance, which is essential for legal driving and protecting against liabilities. By setting the threshold at 250% of the federal poverty level, the program aims to provide coverage to a wider range of households that may be struggling financially but still have incomes above the absolute poverty line.
This eligibility criterion helps to ensure that those who truly need assistance in affording auto insurance can access it, thereby promoting safety and compliance with the law. The program specifically targets low-income residents, aiming to alleviate the financial burden of auto insurance premiums and reduce the number of uninsured drivers on the road.
Understanding this program’s target demographic is crucial for anyone studying personal lines insurance, as it highlights the importance of providing affordable insurance options to lower-income households, which can improve overall community safety and protect individuals from financial hardships that come from accidents or damages.