Do you know if you’re eligible for self-insurance?


Every state has laws that govern minimum liability car insurance requirements, but automobile self-insurance is a way around buying car insurance if you read the fine print. However, the process of getting automobile self-insurance isn’t as easy as it sounds.

If you’re considering self-insuring your vehicle, you should compare the cost of your effort with the cost of a traditional auto insurance policy to be sure you’re making the right choice. To compare car insurance quotes for traditional policies, enter your zip code below, and we’ll help you get started. Or, for an even simpler experience, call (844) 246-8209 to get free, personalized quotes seven days a week.


In this article:


What Is Automobile Self-Insurance?

Automobile self-insurance is the concept of effectively insure your automobile yourself rather than purchasing a traditional car insurance policy. It should be noted that self-insurance is not legal in every state and often requires the owner to self-insurance multiple automobiles.

You’re probably already more self-insured than you think in some aspects of your life. Anytime you buy something without an insurance policy to cover risk, you’re self-insured. If you bought a television and someone stole it from your home, you’d be liable to pay the price to replace it (assuming you want to replace it).

When it comes to automobile self-insurance, you can avoid getting car insurance in select states in two ways:

  • By making a cash deposit with the Department of Motor Vehicles (DMV) or state Department of Insurance
  • By purchasing a surety bond

Basically, you will submit proof that you have enough cash reserved to pay for any injuries or damages in the event of an accident. No matter the means by which you prove you’re self-insured, the amount of money you set aside in your bank account for your car insurance must be more than the amount that the state requires for car insurance.



Which States Allow Automobile Self-Insurance?

Only some states allow drivers to have automobile self-insurance. Others don’t allow self-insurance in any way. Further, some states that allow it only do so if you own a fleet of vehicles.

We obtained data from the Property Casualty Insurers Association of America, as well as state insurance and motor vehicle codes, so we could tell you which states allow automobile self-insurance. We’ll also go over state requirements for how much money drivers must post in bonds or other means to show proof of financial responsibility.

You can only get self-insurance for a small number of cars in the following 10 states. Other states only permit automobile self-insurance if you own many vehicles.




New Mexico





North Dakota



Here’s a list of all of the states that allow automobile self-insurance and the amount of cash that each state requires drivers to reserve in the form of a bond, cash deposit, or – in South Dakota – securities. Keep in mind that most of these states require you to own a high number of vehicles to be eligible for self-insurance. Some require 25 vehicles or more.







New Mexico




New York




North Carolina












Rhode Island




South Carolina




South Dakota



































Alaska And New Hampshire

Alaska and New Hampshire are special cases with car insurance, however.

Alaska doesn’t require select residents to carry car insurance who live in low-traffic volume areas or who live on land that is not connected to a major highway. These residents only have to find means of self-insurance or car insurance if they have been cited for a traffic violation in the past five years.

New Hampshire, on the other hand, is the only state that doesn’t require car residents to carry car insurance. Drivers do have to show proof of financial responsibility in the event of an accident though.



When Is Automobile Self-Insurance Right For Me?

When you’re trying to figure out if automobile self-insurance is the right step for your protection on the road, ask yourself if you have the means to comfortably pay for a bad situation. If you are involved in an at-fault accident with injuries and property damages, will you be able to pay and have enough money left after the accident to take care of yourself and your family?

Here’s a breakdown of when you might choose to use automobile self-insurance or traditional insurance.

Automobile self-insurance may be right for you if...

Traditional insurance may be right for you if...

You have a lot of cars

You only have one car

You have enough money to cover the costs of injuries and damages in an at-fault accident

You need more coverage options than basic liability

You live in one of the states that permits automobile self-insurance  

It’s important to understand the laws in your state around automobile self-insurance before you dive in and start depositing cash or submitting bonds as proof of insurance. To find out about your state’s laws, contact your DMV or Department of Insurance.



Automobile Self-Insurance Vs Driving Without Insurance

If you are looking into automobile self-insurance because you’re having trouble meeting your car insurance payments, you probably won’t find what you are looking for.

We recommend avoiding driving without insurance at all costs, because the legal repercussions can be severe. Different states have different penalties for driving without insurance. Some of the legal penalties for driving without insurance include:

  • Suspension of your license, registration, and vehicle plates
  • Community service hours
  • Jail time

It’s better to purchase a traditional car insurance policy from a provider with minimum limits. Here are some ways to save money on a traditional policy:

  • Choose to pay a higher deductible to lower the price of your insurance premiums.
  • See if your auto insurance provider offers usage-based insurance programs.
  • See if your car has safety features like anti-lock brakes or passive restraints that could qualify you for a discount.
  • Bundle your auto insurance with home or life insurance insurance to get discounts on both.
  • Ask your agent about other discounts that you could be missing out on.
  • Shop around for better car insurance rates annually.
  • Tell your insurance company about any major life changes.

We recommend shopping for car insurance quotes every six to twelve months. That’s because a lot can happen in a year. You could buy a new home, get married, have a child, or move, and your coverage needs and the discounts you qualify for could change too.



Our Recommended Car Insurance Providers

When we reviewed the best car insurance companies in the country, Geico and Progressive were two of the top performers. We scored these providers on coverage, cost, the claims process, and industry reputation to give both overall ratings of 4.5 out of 5.0 stars.

If automobile self-insurance isn’t the right move for you or if you aren’t eligible in your state, we recommend getting car insurance quotes from Geico and Progressive. Enter your zip code in our tool below or call (844) 246-8209 to get started.


Geico Insurance: 4.5 Stars

We named Geico the best choice overall for its extensive coverage, affordable prices, and variety of discounts. Standard coverage is available, plus add-on types of insurance like mechanical breakdown coverage and roadside assistance. Geico partners with many professional and academic associations to give certain members discounts on car insurance, and there are discounts for things like being a good student and being a safe driver. Read our Geico review for more information.


Progressive Insurance: 4.5 Stars

After doing our homework, we think Progressive is the best option for high-risk drivers, including drivers in their 20s and those with DUIs in their driving history. Progressive has advanced tech, including the Name Your Price tool that uses the price you want to pay to match you with budget-friendly car insurance plans. Plus, Progressive has the usage-based Snapshot program that assesses safe driving habits with a mobile app to help you save money on car insurance. Read our Progressive insurance review for more information.

Still not sure which auto insurance provider is right for you? Maybe our review of Geico vs Progressive can help.




In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
  • Availability: We consider availability by state as well as exclusions for specific groups of drivers.
  • Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
  • Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
  • Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
  • Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.


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