Most people look into purchasing car insurance well ahead of buying a car; this is mainly due to the common laws surrounding holding a valid policy. What many people don’t know is that a few states out there that don’t make it illegal not to have valid insurance.
Some of these insurance law Free states are;
- Washington State
- New Hampshire
These states offer its residents the option of proving their ability to pay for damage in the event of a fender bender instead of requiring that a valid policy be put in place.
New Hampshire goes so far as to not even have a financial ability need, but if you get in an accident, you will have to put up a cash bond until the situation is resolved.
This is good news for all of those careful drivers who hate paying up every month, but on the same coin, it’s also bad news for those same careful drivers who have to share the road with the less reliable.
What to do in the cases where a driver is uninsured
Drivers that live in states that don’t need insurance but need proof of your ability to pay, you can make a deposit of cash with the DMV, obtain a self insurance certificate from the DMV, or get a surety bond for $35,000.
This amount is calculated using the minimum requirements of an real insurance policy for the state. For example, the least amount of coverage for death or personal injury is 15 thousand dollars per singular person, thirty thousand dollars for multiple people and five thousand dollars for the actual property damaged.
Surety bonds are easily acquired; all you have to do is pay the regular fees that are derived from the overall amount of the bond you seek. The company who issues the bond then issues you a credit line in the amount of the surety.
If you are in an accident, you will have to pay the full amount of the surety, but if you don’t get in a wreck, then you only pay the fee. The cost of these fees can vary by state and really depend on the strength of your credit profile and the laws of state.
The average nationwide is between one and five percent. Most states that don’t require insurance also don’t track the number of uninsured motorist in the state. Both companies and private citizens are allowed to drive without an insurance policy.
Ohio’s Drive Free Program
Ohio is another state that allows its residents to prove their ability to pay for damage in lieu of buying a policy. You still must offer some sort of way to pay for any damages you may inflict, these options can be exercised via;
- A Surety bond in the amount of $30,000
- Make a deposit of $30,000 cash with the treasurer of Ohio
- A bond issued from Ohio DMV with a value of $30,000 backed by the real property worth $60k, duly signed by two parties.
Ohio, unlike other state with no insurance laws, takes a random selection of 5,400 registered cars and passes them though an insurance inspection. They process this number on a weekly basis, and car owners who are unable to offer proof on coverage, in one form or the other, are subjected to fines, and license suspension until such time as your registration is brought up to date.
Iowa, Drive or Be Driven
This is yet another state with lax coverage laws, but rigid financial stability regulation. You can register a car without it being insured while in most states you must have valid insurance as well as a state inspection sticker prior to registration. In the even you are pulled over, you have to have some form of proof that you can pay for an accident such as;
- A Surety bond in the amount of $55,000
- Make a deposit of $55,000 cash with the secretary of Iowa
Most people find this not only more tedious, but more costly in the long run if they only have one car to insure, however, companies with fleets or a person with more than three cars can reap a lot of savings by availing this option.
In New Hampshire, if you haven’t been in a accident before then you don’t have to hold a valid policy, if you are a party to an accident with a uninsured party, then your uninsured driver coverage will active on your policy.