What are the regulations for self insurance in Florida?
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Asked August 20, 2018
Ordinary insurance involves someone else assuming the risk. When you have self-insurance, here in Florida, you are the risk taker. It is an alternative option to traditional Florida car insurance.
How does it work?
You either need to have a lot of money in the bank or own a lot of vehicles. You need to prove to the insurance companies that you can cover your own liability risk. You are reducing the costs you might normally pay by keeping a small fund on reserve. You rates are going to be lower, but you are taking on more risk. That means that you are the one to cover most of the costs should you get into some kind of accident.
You do need to prove that you are worth the financial risk. That is why I said you need to have a lot of money to do this. You need to show them that you can cover your own costs if anything were to come up.
How much money do you need to have?
Generally speaking, you need to be worth $500,000 or more to qualify for self-insurance. Do you have a partner who uses a percent of the money? Most people use 8% of the $500,000. That is about $40,000 a year. Does your partner need more than that? You need to have at least $1 million or more in the bank.
You might want to speak to your current insurance company to see what your options are. Do you have more than 2 vehicles you are using? You can use self-insurance to reduce the payments, but you still need at least $500,000 in the bank. You can also check out the Florida Department of Financial Services or the Florida Association of Self Insured for more details.
Answered August 21, 2018 by fl_pc