A Minimum insurances self-insured person is someone who chooses to forego the purchase of car or health insurance from an insurer. Instead, this person tries to meet the state’s minimum requirements for these coverages by establishing their own fund and demonstrating that they have sufficient assets to pay for claims. This usually requires opening a special savings account, purchasing a surety bond or getting a certificate of self-insurance from their state’s Department of Insurance. It’s generally a good idea to consult with an expert before opting to be self-insured for any of these coverages.
Most people who forego insurance opt to do so because they feel that the premiums are too high. Others may not believe that they need the protections offered by an auto or health policy, and a small business owner might feel that an expensive commercial policy is unnecessary for his operation. Some individuals with significant savings and no debt may also choose to be self-insured if paying the insurance company’s premium for potentially unlikely events doesn’t appeal to them.
For example, a family that owns two cars might choose to forgo the purchase of a car insurance policy, instead relying on their own funds to pay for a car accident. However, this is a very risky strategy for anyone who does not have substantial savings and assets in reserve. Car accidents and medical bills can quickly add up to huge sums.
Many states require that drivers carry a minimum level of car insurance to protect them from financial loss in the event they cause damage to other vehicles or persons. In New York, for instance, the minimum limits are $25,000 per person for bodily injury liability protection and $10,000 per accident for property damage liability. The insurance company would only pay up to these limits, and the driver would be responsible for any additional damages.
Some states have laws that allow businesses and other organizations to be self-insured for workers’ compensation, disability and Paid Family Leave benefits. To qualify, these entities must meet the state’s minimum standards for deposit and security in the form of a cash account, an irrevocable letter of credit or a surety bond. Some states also have other requirements, such as having an actuarial report prepared and providing proof of financial responsibility to the Department of Labor.
Large firms are more likely than smaller ones to be self-insured for employee health benefits. This is partly because the larger a firm is, the more actuarially predictable its claims are and the less it needs to rely on cost-of-living adjustments in premiums. Large firms are also more able to handle the risk of unexpectedly high claims, such as in the case of catastrophic illness or severe injuries. Regardless of the size of an employer, though, it is never a good idea to forego health insurance entirely. This is particularly true for families, who need the reassurance of knowing that they can access high-quality care when needed.Минимални осигуровки самоосигуряващо се лице