So all US states require all cars on the road to have insurance … since insurance is just dollars put asside for release in the event of emergencies or other pre-determined event … why cant I just put 0,000 into a bank account and call it my auto liability account and have my car insured with the state under my name providing that I don’t touch those funds?
Home | Insurance | Blog article: Instead of buying auto insurance is there a way to just have a savings account just for $coverages?
mbrcatz17 11:47 am on November 12, 2009
Some states will allow you to post a bond instead of buying insurance – but you can’t put the money in YOUR savings account, it has to be held by a bonding company or the state – ie, it won’t get interest. That’s so if/when the accident happens, you can’t change your mind and decide not to pay the other party.
REAPER 11:47 am on November 12, 2009
good luck with that.
i_am_xtc_4_u 11:47 am on November 12, 2009
there is some law which lets you do that but check your state law.
But keep in mind, even if you have a 100,000 as an insurance policy if you get into a lawsuit your insurance company pays the legal fees which does not come out of your policy limits and they have to provide you with the best defence possible otherwise it is a bad faith (when an insurance comapany does not protect the best interest of its policy holder) claim against them. That is somthing they really want to avaoid. This is just the beginning there are million other complications.
helixburger 11:47 am on November 12, 2009
You can, check with your state insurance commisioners office.
gauthanrahl 11:47 am on November 12, 2009
I checked this out about a month ago. Legally the answer is no. Why, I don’t know. But I would Assume that there is no proof that the money in the savings account would be used for Car coverage only.
miketorse 11:47 am on November 12, 2009
That’s the problem. It would have to be like $250k to qualify. Who wants to tie up that much money because they don’t want to pay auto insurance? Who has that kind of money, but yet still doesn’t want to pay auto insurance?
Doesn’t make sense.
tepidorator 11:47 am on November 12, 2009
I just had this conversation with a friend. Many states have what they call a bond alternative. In California they do. You can post this bond with the DMV and you don’t have to buy insurance. The bond must be purchased and given to the DMV. Sorry no honor system here. These laws vary state by state. check with yours regarding this type of coverage. You only pay a percentage of the bonds face value. So a million dollar bond might be300 a month or something. The point I want to make is that you should not skrimp here. buy as much coverage as you can afford.
tugboatchuy 11:47 am on November 12, 2009
You don’t need to have a set account. Check with your state law but most states require that you either have auto insurance OR $35,000 surety bond. It varies state by state on the minimum requirements.
Carl Parker 11:47 am on November 12, 2009
Some states can allow you to have a stated amount bond. Not theoritically. Think of how much Money it would cost you if you just paid premiums everyear.