While the huge majority of drivers must comply with state of matter minimal car insurance requirements, most states allow little-known alternatives to indemnity, and one state of matter requires neither policy nor an alternate. These alternatives are a form of self policy, but before you start driving insurance-free, read the rules that apply where you live.

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What most drivers don’t know

state indemnity departments frequently tell drivers they must get car indemnity. But dig into the regulations and you ’ ll find that ’ s not always quite dependable. In many cases, you can arrange self-insured car indemnity by depositing cash or posting a bond with the country in stead of policy. here ’ s a breakdown of states where you can deposit funds or post a bail in stead of car indemnity :

state Bond/Deposit
alabama $ 50,000
arizona $ 40,000
California $ 35,000
colorado $ 35,000
delaware $ 40,000
Idaho $ 50,000
Indiana $ 40,000
Iowa $ 55,000
Louisiana $ 55,000
maine $ 127,000
maryland $ 75,000*
Massachusetts $ 10,000
Mississippi $ 15,000
missouri $ 60,000
Montana $ 55,000
nebraska $ 75,000
New Mexico $ 60,000

New York $ 25,000
North Carolina $ 85,000
ohio $ 30,000
oklahoma $ 75,000
Rhode Island $ 75,000
South Carolina $ 35,000
South Dakota $ 25,000**
tennessee $ 60,000
Texas $ 55,000
utah $ 160,000
vermont $ 115,000
Virginia $ 50,000
Washington $ 60,000
wisconsin $ 60,000
Wyoming $ 25,000
* In Maryland, drivers must besides meet the state ’ second prerequisite for personal wound auspices, unless waived, and uninsured motorist coverage. ** Or $ 30,000 in securities. source : property Casualty Insurers Association of America, state indemnity and drive vehicle codes .

Most states will besides consider self-insurance plans, in which vehicle owners pay for accidents they or their employees cause. States approve these plans on a individual basis and typically require them to provide as much coverage as regular indemnity. You normally must own a fleet of at least 25 vehicles to self-insure, but 10 states allow self-insurance plans for those who own fewer vehicles : Alaska, Connecticut, Georgia, Hawaii, Indiana, Maryland, New Mexico, North Dakota, Pennsylvania and Vermont.

New Hampshire and Alaska: Going rogue

New Hampshire is the only country that doesn ’ t command residents to have policy, or even prove they could cover their liability in an accident, according to the Insurance Information Institute and Property Casualty Insurers Association of America. But if you do cause an accident, the department of state will demand proof of policy or an ability to pay for discussion of up to $ 50,000 in injuries and repair of up to $ 25,000 in property damage. If you can ’ metric ton, you ’ ll face pause of your license and registration. Drivers can meet the requirement, if they must, with a hostage bond or by depositing money or securities with the country treasurer, or with alternate evidence that shows you have the ability to comply with state of matter requirements. The “ Live Free or Die ” department of state might besides require you to prove fiscal responsibility for at least three years after being found at defect for an accident, driving while intoxicated, failing to stop and report an accident, vehicular homicide or assault, or a second ticket for speeding or driving recklessly. Alaska exempts some residents — those who live in areas not connected by down to the express highway arrangement or to a road with an average day by day dealings volume greater than 499 vehicles — from car indemnity requirements. The exemption presently includes residents of 294 places, including islands, towns and villages. however, these drivers do have to get car indemnity if they have been cited for a unplayful dealings trespass within the previous five years.

Should you drive without auto insurance?

Most of us pay more for indemnity than we ever get back in claims. If that weren ’ t the encase, indemnity companies would go out of business. But that doesn ’ thyroxine mean it ’ s a good theme to drive uninsured. If you live in one of the above states and you ’ re considering going without coverage, consider these factors :

  • Do you have adequate money for a bond ? In every state except New Hampshire you need to put up quite a bit of cash in stead of indemnity .
  • Do you have better things to do with your money ? even if you have the money, locking it up in a bond or deposit barely to avoid car indemnity payments may not be the best use of it. You might be better off investing for retirement, for case .
  • Can you afford the hazard ? Causing equitable one accident with significant injuries or damage would ruin many people financially and is a big hazard even if you can afford the personnel casualty .

car insurance is the best choice for about anyone who drives. You may be able to save money if you compare car indemnity quotes.

Aubrey Cohen is a erstwhile staff writer at NerdWallet, a personal finance web site. persona via iStock .

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