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Nebraska Car Insurance

Nebraska is home to the Cornhuskers, honeybees, and a whole lot of cows. While this summary might make it sound like Nebraskans are die-hard football fans who love steak and honey, Nebraska has emerged as a major commercial hub in the Midwest, with transportation as one of Nebraska's major industries.

As a result, "The Cornhusker State" boasts an expansive transportation system. Since transportation is strong in Nebraska, it's crucial that everyone who operates a motor vehicle in the state understands Nebraska's transportation laws and auto insurance requirements.

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To learn everything you need to know about auto insurance laws in Nebraska, continue reading this guide.

What is a financial responsibility law?

Financial responsibility laws aren't the same as mandatory auto insurance laws. In a state that requires you to prove financial responsibility, you aren't necessarily required to buy auto insurance.

Instead, it's your duty as a vehicle owner to show that you're able to pay for financial losses that you cause. There are several different ways that you can comply.

What types of vehicles do you need proof of financial responsibility for?

Based on state law, any vehicle that you register to operate must have proper proof of financial responsibility at all times. Any private passenger car, truck, or van used for personal purposes will need acceptable proof.

Here are exceptions that don't require proof:

  • Trailers
  • Boats
  • Snowmobiles
  • Campers towed by vans or trucks
  • Dealer-plated vehicles with dealer coverage

How can you comply with Nebraska Financial Responsibility laws?

Residents in Nebraska have more flexibility than residents in states with a mandatory insurance law. Even though there are alternatives to buying insurance, it may not be a good idea to forgo coverage.

Once you understand your options and how much they'll cost you, you'll see why most residents buy insurance to comply.

Here are acceptable forms of proof of financial responsbility:

  • Bond – One option is to buy a surety bond through a licensed company in Nebraska. The bond must be noncancellable and in the amount of $75,000. Bonds are only acceptable after they are filed with the DMV.
  • A Certificate of Deposit – If you have the cash, you can also deposit money as a security deposit with the State Treasurer. At least $75,000 must be deposited in cash or securities before a certificate of deposit can be issued by the Department of Motor Vehicles. Valid certificates will have a state seal.
  • Property Bond – You may also prove financial responsibility with a property bond that has no less than two sureties who have real estate in the state of Nebraska. Before the real estate can be used as collateral a judge must approve the bond. After approval, the vehicle owner must show that there's at least $75,000 of equity in the properties that can be used to cover damages.
  • Certificate of Self-Insurance – If you own 25 or more vehicles in your name, you may qualify to apply for a certificate of self-insurance. The person's ability to pay judgments and other financials will be reviewed before this is approved by the department. You will be audited regularly if you self-insure.

Your Option to Buy Insurance

The most popular way to comply with Nebraska law is to maintain evidence of insurance through a company that's licensed to do business by the Department of Insurance. For insurance to be valid, the names on the policy and registration must match.

Also, the following information must be on your ID cards:

  • Name of company
  • Policy number
  • Year of vehicle
  • Make and model
  • VIN
  • Effective date and expiration date
  • Liability coverage carried

Why is it best to buy auto insurance?

Even if you have $75,000 to deposit, it's better to buy protection at a fraction of the cost so that you can deposit your hard-earned money in an account that accrues interest. If you self-insure or use a security deposit, you're putting your money at-risk because you'll be paying for all of the damages out-of-pocket.

You're never guaranteed to have a loss, but you also never know how catastrophic a loss can be. That $75,000 might not be enough to compensate the victim, and as a result, your property, savings, and even future wages are at risk of being taken.

However, with insurance, you have a company to handle claims for you and you have guaranteed protection.

How much insurance are you required to carry?

If you decide that buying car insurance is the best option for you, you'll be required to comply with the law by purchasing a minimum amount of liability coverage. Like every state, Nebraska requires its own minimum limits.

Here's a breakdown of the limits that you must carry:

  • Bodily injury liability – $25,000 per person/$50,000 per accident
  • Property damage liability – $25,000 per accident

What does the required coverage pay for?

Basic auto insurance doesn't pay for everything that can happen. For example, liability coverage only pays for third-party damages and not your own. So, it's important to distinguish between third-party and first-party coverage before you feel protected.

Bodily injury liability will pay for the medical bills and other related expenses that someone who isn't in your car incurs. Property damage liability will pay to repair cars, fences, houses, buildings, sheds, and other property that you have no ties to. However, you are not eligible to file a claim against your own liability coverage if you suffer damages.

Why don't the state minimums cover you?

You might think that the state wants you to protect yourself, but that's not the case. In actuality, financial responsibility laws are in place to ensure consumer protection.

Your ability to repair your own car doesn't matter to state officials. If you need help paying for these repairs and you're at-fault in a loss, you need more coverage.

How can I cover my car with Nebraska auto insurance?

The only way to buy protection for your car is to add full coverage to your policy. Even though full coverage is a term that's used quite often, it's not actually a box that you check when you're getting a quote. In most cases, a full coverage policy includes comprehensive and collision coverage.

Some plans may offer even more protection like:

  • Zero deductible glass
  • Uninsured motorist protection
  • Medical payments
  • Roadside assistance
  • GAP coverage
  • Replacement car coverage
  • Towing
  • Roadside assistance
  • Rental car reimbursement

What do comprehensive and collision cover?

Comprehensive and collision are physical damage coverages that pays to repair property that you own. Instead of having a limit of liability like your other coverage, your physical damage coverage will only pay up to the actual cash value (ACV) of the car at the time of the loss.

It is important to note that any deductible that you carry will be deducted from the payment.

Comprehensive pays for non-collision losses. Some examples include: fire, theft, explosion, flood, vandalism, hail, and an encounter with a live animal. All glass claims are also made under comprehensive.

Collision pays when you're at-fault in a crash or when your car overturns. In some cases, collision pays when you're hit by an uninsured driver.

How much is insurance in Nebraska?

If you're curious to compare the cost of premiums to the cost of a bond, you can start by taking a look at the average premiums reported in the state. Based on the latest reports conducted by the Insurance Information Institute, Nebraska ranks 43rd in auto insurance expenditures from highest to lowest.

The average expenditure in 2013 was $638.74 per year for full coverage. Even though this is an average, you could pay significantly more or less for coverage depending on the car you own, your driving habits, your driving history, and other personal rating factors.

Because getting a personal auto insurance quote is important, you should start by comparing insurers. To get non-binding quotes, use an online quote tool. This connects you with several insurers at once so that you can compare premiums thoroughly and make the choice that is right for you.

Start comparing auto insurance rates now using our FREE online comparison tool below!

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