Can I Self-Insure My Car?

The purpose of insurance to guard against loss or damage. For example, health insurance is there to help you pay for medical costs that would otherwise be too expensive for most people. Insurance can also specifically protect someone other than the person who is insured.

A good example of this is life insurance, which would provide money to named beneficiaries in the event that the person who's insured dies. Some insurance is required by law, while others are simply an option. One type of insurance that states usually require their drivers to have is car insurance.

Common Types of Policy Coverage

Most states require drivers to purchase specific types of car insurance coverage and set mandatory minimum liability limits. Generally speaking, there are different types of damage that car insurance policies will cover. Probably the two most common categories of car insurance are bodily injury liability and property damage liability.

Bodily injury liability covers the medical costs that result from injuries inflicted by the insured driver on others. Property damage liability covers damages caused by the insured driver to other people's property, which can include cars or items located on real property (such as a fence or mailbox).


Usually people purchase car insurance from an insurance company and pay a monthly premium. But, some states allow drivers to self-insure their car. Self-insurance can take a variety of forms such as purchasing a surety bond or making a deposit with the Department of Motor Vehicles. Basically, the driver sets aside money to cover insurance needs, and the amount set aside must meet the minimum insurance requirements of the state.

So, as with most things that involve the law, whether or not self-insuring your car is an option will depend on the laws of your state. In the event that you want to learn more about the car insurance laws in your state, it's a good idea to reach out to an insurance attorney near you.

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