Can You Get Away Without Car Insurance? Sure, If You're Rich

By Blake Z. Rong | May 17, 2012
If you live in California, Texas, New Hampshire and a handful of other states, you can get away without insurance—albeit with a very important caveat. Some states will let you drive without car insurance, but only if you can prove to them that you can pay for all liable damages out of your own pocket. You can prove this by purchasing bonds or deposits with the state's Department of Motor Vehicles. For example, California allows you to buy a $35,000 cash deposit with the California DMV, post a surety bond for the same amount or get a self-insurance certificate. The reason for these values? Most states still require liability insurance, for when you hit someone else. Ohio and Iowa have similar systems requiring bonds from the state. Most states. The only exception is the "Live Free or Die Hard" state of New Hampshire, a state that seems to hate its own government so much it thinks sales taxes are a Communist plot (and that cheap fireworks are a God-given rite of passage), and it doesn't even matter if you don't have the money. Liability insurance isn't required unless you're in an at-fault accident, and your uninsured driver coverage will foot the bill if you're hit by someone who isn't insured.
"New Hampshire is always contrary to other states," says James Van Dongen, a spokesman for the New Hampshire Department of Safety. "The Legislature has never felt that they should compel people to buy insurance." But if you're at fault in New Hampshire—hitting one of the many motorcyclists that ply the state's byways without a helmet, for example—and you don't have insurance, you'll have to post a bond equal to how much damage you've caused. Who springs for this plan? Fleet and rental companies usually choose to insure themselves, which becomes more cost-effective if they have more than 25 vehicles. People with rare cars do too, as this MSN article points out: Michael Reza imported some rare cars from Europe to California, but couldn't find a company to cover them. Because he didn't drive the rare European-spec cars around very often, he chose to post a bond for them. "I was more concerned about liability and other people," he said. "It makes you cautious." So there you go. The states that, so far, allow this are California, Texas, New Hampshire, Ohio, Washington, Iowa, and Tennessee, and it's only practical if you have a rare or exotic car...and lots of money. After all, those bonds aren't cheap. Source: MSN Money