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Alternatives to Car Insurance

Alternatives to car insurance are legal ways drivers can get around buying auto insurance in their home states. Many drivers find themsleves wondering why car insurance is so costly and wishing there were some alternatives to buying it. Based on the laws on the books in virtually every state across the country, most motorists choose to carry auto insurance on their vehicles in order to come into compliance. But written into state laws are certain alternative measures to become compliant. For most auto owners these options are not realistic because they do require a sizable expenditure of cash. But for some of us, they are a great way to self insure and demonstrate financial responsibility without having to carry a liability policy or meet the insurance coverage requirements for the states in which our cars are registered.

Regardless of whether you choose traditional auto insurance options or alternatives for self insuring your vehicles, as a driver and an auto owner you must be prepared to demonstrate financial responsibility and take care of your obligations in the event of an accident. There are multiple ways to go about doing this depending on where you live, but one of the most common methods is by purchasing surety bonds for motorists and fleet owners. No matter what option you choose to go with, it is important to select a car insurance option that keeps you in compliance with the law and meets your financial budget as a driver and a consumer.

Financial Responsibility for Accident Damages

Most people go ahead and buy car insurance coverage to satisfy the requirements of their state's financial responsibility laws, but there are other options in some states. The main reason for most people to purchase auto insurance aside from legal compliance is to be protected financially in the event of a liability situation. Car accidents can get very costly when the expenses related to dealing with the other driver's injuries and property losses are tallied up. Drivers who are not insured and who do not have any alternative form of coverage or protection are obligated to pay for these costs out of pocket when they are found liable in an accident.

Most of us do not have the financial means to pay for a large judgment out of pocket. In fact, many drivers really couldn't afford to settle a smaller claim in this manner since so many of us live paycheck to paycheck. Without some type of insurance or financial protection liable drivers have to look at getting rid of assets or draining savings to satisfy a claim in the aftermath of an accident. The other options we have are preferable to having to do this as consumers since they protect our assets and help us hang on to what we have.

Surety Bonds for Auto Owners

Surety bonds are one common option states allow drivers to choose as a means of demonstrating financial responsibility and coming into compliance with state auto insurance law. A surety bond is a way for motorists to show that they can meet state requirements for liability coverage and other areas of protection required by state law without having to buy an auto insurance policy from a provider. This option is only available in some states; it involves buying a bond in the same amount as the required combined liability minimums in the state. Drivers usually also have cash options where they can simply keep money on deposit with the state DMV, but bonds are a better choice for many motorists because they normally only require actually having to put down a certain percentage of the bond value, keeping present cash flow higher.

Obviously before we decide to go this route, we must find out for sure whether it's even available where our cars are registered. Get on your state insurance department website or call and find out about financial responsibility options for auto insurance. Once you've confirmed that your state allows surety bonds, choose a well established bond company with a solid reputation. Take care of any necessary paperwork and payments and get the proof of financial responsibility you need to store in your car. This is required for everyone even if we choose alternatives to car insurance in case we get pulled over or get into an accident.

In some states, this bond option carries fleet requirements with it and is not available to individual drivers. In these states a minimum fleet size is usually required. Each state sets its own rules and guidelines and your best bet as a driver is to research details for your state with your state insurance department or DMV.

Choose Appropriate Car Insurance Options

Each driver should choose appropriate options that make the most sense to them financially. If freedom from car insurance requirements is important to you and you have the cash, legal alternatives to car insurance are good options.


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