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Does a Zillionaire Have to Insure Their Motor Vehicle?

1 points by Normille ↗ HN
It's that time of the year again when the tedious process of ringing round to get the best quote for renewing my van insurance is nigh and, as ever, a random thought flits across my vacant skull:

Would a zillionaire, such as a Bill Gates or an Elon Musk be able to drive a vehicle without insuring it?

As well as getting some of our money back if our vehicle is stolen or damaged, the main reason vehicle insurance is compulsory is to guarantee that we [via our insurance company] will be able to cover the costs of any damage, injury or death we inflict on anyone else.

But what if you're a Gates, a Musk, a Zuckerberg, or suchlike? Your own personal wealth far exceeds that of any insurance company. So, if you were stopped by the police and charged with driving without insurance, would you have a valid legal defence in saying "I don't need insurance. I can cover any liability that might arise, from out of my own pocket"?

And, if so, how far down the monetary food chain would that defence work? I havent got my current insurance docs to hand. But, in the small print, there's usually something to the effect that you're covered for up to XXX hundred thousand £££s of 3rd party liability. So, could a very rich person deposit XXX hundred thousand £££s in a deposit account as an 'emergency insurance liability cover fund' and then use the existence of this fund to avoid having to take out insurance via an actual insurance company?

If so, it would also have the advantage that they'd actually be earning interest on the money, so their home-rolled insurance fund would actually be increasing with each passing year. A real "no claims bonus"!

6 comments

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edent
The UK used to have this. Rather than paying for car insurance, you could deposit £50,000 with an insurance company. See https://www.gov.uk/government/consultations/motor-insurance-... for details on what happened to the scheme.
thinkingemote
It was £500K and appeared to be per organisation not vehicle, and was a once off deposit, so a little different.
pmontra
The zillionaires are probably sitting in the back seat of a company car most of the time, working. If they personally own a (super)car some countries have mandatory insurance. I live in one of them so I can't really answer you question, sorry.
4cao
According to Wikipedia [1], it's allowed in some states, and the deposit amount is:

$55k: Texas

$50k: Mississippi

$40k: Arizona

$10k: Massachusetts

New Hampshire and Virginia seem to allow it without a deposit. In Virginia you have to pay $500/yr.

It's common for companies with large vehicle fleets, particularly car rental companies, to self-insure.

1. https://en.wikipedia.org/wiki/Vehicle_insurance_in_the_Unite...

Normille
Thanks for the informative replies. I didn't realise my 'random musing' was actually "a thing" and was so widespread.

From my point of view [based in UK] the link to the UK Government's statement on why the deposit scheme was dropped is quite interesting. Most of their objections to retaining the deposit scheme; people not renewing their deposits, people's financial circumstances changing, insufficient size of the deposit. could equally well be applied to the system of insuring through an insurance company.

The Government also quotes the possibility of claims running into "many millions". Again, I stand to be corrected but I'm pretty sure my insurance policy has a stated ceiling on 3rd party liability which is in the hundreds of thousands. I'd have thought any claim involving "many millions" would be a the result of an incident of such magnitude that it would go well beyond a standard motor insurance claim, anyway.

And, again; a billionaire or multi-millionaire could still hypothetically cover even "claims running into the millions" from their own pocket. So the UK Government reasoning still seems flawed, in those cases.

Next topic: Who should pay for the insurance when the cars are self-driving? [But I'm sure we've done that one before, a few times!]