Financial responsibility is a requirement for operating a motor vehicle on the roadways in every U.S. state. Most of the states require drivers to purchase a minimum level of liability insurance coverage. What is the legal difference between proving financial responsibility and having minimum liability coverage? Learning about self-insured auto insurance helps understand the answer.
Self-insurance car insurance is legal in some states but how much does it cost? Competitive car insurance quotes are easy to find for liability premiums. To find car insurance rates for self insured auto plans you have to do a little more research. Read ahead for a guide on self insured car insurance policies in 2021.
Self-insured coverage is available in some U.S. states, but what does this mean? State auto insurance laws vary across the nation but every state requires drivers to prove and maintain a minimum level of financial responsibility when driving a vehicle. Most U.S. states require drivers to purchase some amount of liability insurance coverage.
In states with more flexibility, self insured auto plans are one of the ways to save you money and still allow you to legally drive your car on public roadways. What is self insured car insurance and what does it mean for your budget?
The states of Virginia and New Hampshire each have their own system in lieu of requiring minimum liability car insurance. Auto insurance is optional in Virginia, but the price of opting out of owning it is $500 per year payable to the state.
New Hampshire drivers are on the hook for up to $50,000 in accident-related damages when found at-fault. Virginia drivers are also legally responsible for paying all accident-related expenses when at-fault. Both these cases are examples of financial responsibility. The concept of self-insured coverage is similar albeit with a few distinct differences
Various forms of self insurance for your automobile are available in participating states.
A surety bond is essentially a promise to pay for any accident-related expenses, debts, defaults and failure of another to pay. Depositing money into an account held by your state Department of Motor Vehicles (DMV), state Department of Insurance or another type of secured deposit/escrow account are also examples of potentially acceptable self insurance plans for your automobile. The total amount of your surety bond or money placed into a secured deposit account is required to have at least as much as state minimum coverage limits by law. Self insurance is not legal in multiple U.S. states.
Most drivers for whom self-insurance policies make sense have significant financial resources or own a large amount of vehicles. In states where this type of coverage is permitted, what are the benefits to you?