Car insurance is always an important cost of car ownership. According to the National Association of Insurance Commissioners, the average cost of car insurance is about $1,134 every year in the U.S. However, do we need to pay that amount? Through this article, we explore car self-insurance.

1. What is car self-insurance?

Car self-insurance makes you pay for all car accidents by yourself. There is no insurance to pay for liability or property damage claims. 

There are two ways for people to select if they want to do car self-insurance:

  • Register for Self Insurance
  • Purchasing a bond by the states’ requirements

In most cases, you need to be a business to register for self-insurance and so I am going to focus on bonds for personal car self-insurance.

2. Car insurance vs. Self-Insured

Insurance typesCar insuranceself-insured car insurance
PaymentPay a monthly premium to your car insurance company.Pay annual bond premium.
CoverageInsurance will pay for the incident.

Bond will pay for the incident but you will pay the bond company back. 


Both insurance and bonds have coverage limits. You will have to pay damage costs that exceed any coverage limit. Car insurance limits can be adjusted but bonds cannot and are different by state.

3. Who is eligible for car self-insurance?

  • Financially secure
  • Have enough money to cover all automobile risks
  • Bond company acceptance
  • Live in a state that allows you for car self-insurance

4. Cost to self-insure

The bond premium can be 1% to 10% of the bond amount depending on your state and credit score. The below table will help you gauge how much your bond will cost based on your state.

5. What are the benefits and the risks?


  • Potentially can save money
  • You won’t be affected by shifts in car insurance rates.
  • There is no claims process. If there is an issue with your car, you can fix it right away without waiting for adjusters and approvals.


  • You are responsible for all risks
  • You take responsibility for any damages over the coverage amount
  • If you can’t pay for the damages, your licenses and registrations will get suspended.
  • Reapply for bond every year

If your interested, make sure to look at point 4 to see how much bond premium will cost you. It may or may not be worth it depending on your situation. For example, in my state, my car insurance price is lower than the best bond premium rate.


If you want to know more information, please contact We Care Insurance. We are here to help you!

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