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Vehicle insurance alternatives recognized in other states?

Personal Finance & Money Asked by Confirmed.Bachelor on August 20, 2021

When it comes to financial responsibility laws for vehicle liability, my current understanding is that the state where the vehicle is registered in is the deciding factor for legal compliance with other states being driven through due to some sort of reciprocity or the insurer having agreements with networks of underwriters where coverage limits expand as needed to at least the required minimums.

However, there are alternatives to conventional insurance that I am very interested in, such as surety bonds, security deposits held by the state, or even self-funded insurance as a small business fleet. Surety bonds require a third-party which I would assume acts like a traditional insurance policy insurer to have elastic compliance on an interstate level.

But what about the security deposits at the state where the vehicle is registered? Is a receipt / certificate of satisfactorily meeting financial responsibility in the home state sufficient for interstate travel?

One Answer

It seems that there are insurance alternatives such as surety bonds, self-insurance, cash, or security deposits as you mentioned. It is also possible to pay an uninsured motorist fee to drive legally without auto insurance in some states. It is however much harder to get and the motorist still must meet the state's minimum policies. Some states allow security deposits for at least $60,000. I therefore would not really recommend the alternatives

Answered by wilkvolk on August 20, 2021

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