In Nebraska – the “Cornhusker” state – you may find it hard to obtain auto insurance coverage in the “voluntary” market if your driving record includes multiple motor vehicle violations or accidents. “Voluntary” is the insurance industry’s term for the regular insurance market where most drivers find coverage. If a subpar driving record or other factors - such as being a college student with limited driving experience - causes you to be turned down for auto insurance, then you can inquire about the Nebraska Automobile Insurance Plan (NE AIP). As long as you meet the eligibility criteria described below, you may well find the Nebraska auto insurance coverage that you need to be on the road legally. Nebraskans are required to have auto insurance coverage in these minimum amounts: $25K/$50K per accident for Bodily Injury, $25K/$50K per accident for Uninsured Motorist, and $25K per accident for Property Damage.
What is the Nebraska Automobile Insurance Plan (NE AIP)?
Nebraska implemented this Plan back in 1946 to help every driver on the road stay properly insured regardless of his or her driving records. Nebraska’s AIP is an entity that accepts and assigns drivers, who are considered too high-risk to find coverage on their own, to auto insurers that are licensed to do business in Nebraska. If an insurance company wants to do any auto insurance business in the state, they must participate in the NE AIP.
Assignments are made based on the market share of the insurance companies in the state. So, for example, if Allstate covers 5% of Nebraska’s drivers overall, then Allstate will be assigned 5% of the high risk drivers by the Nebraska AIP. This also means that you can’t pick your insurer – one will be assigned to you instead.
In recent years, the number of drivers utilizing the Plan has dropped, as insurers have gotten better at reserving for the additional risk of providing coverage for higher-risk drivers in light of increasing competition. This is good news for Nebraska motorists, because there should be more competitive prices. However, if you can't find a carrier willing to cover you, you can always seek coverage in the “residual market”, which is the NE AIP.
Nebraska AIP Eligibility
For starters, you have to certify on your application to the Nebraska AIP that you have tried to find auto insurance in the voluntary market within the last 60 days and have been turned down. If that is the case, then as long as you have a car registered in Nebraska and a valid driver’s license, you should be able to proceed with your application.
Note that you will not be eligible for coverage through the Nebraska AIP if any of the following are true:
- You have an outstanding insurance premium bill with any Nebraska auto insurer
- You have not brought your car in for a safety inspection by an authorized insurance representative, as requested
- You have omitted or misrepresented facts on your application, and the Nebraska AIP determines that you are applying in bad faith
The good news is that if you pay the outstanding premium and/or bring your vehicle in for inspection, then your Nebraska AIP application can proceed immediately. The bad news is if you are deemed to be applying in bad faith, the Nebraska AIP can refuse to insure you and make you wait 12 months before you apply again.
Note that in Nebraska you will be eligible for coverage even if your vehicle is an antique (older than 25 years), self-propelled motor home, snowmobile, or golf cart, as long as it is registered in Nebraska.
Nebraska Automobile Insurance Plan Coverage
Drivers buying insurance through the AIP in Nebraska are offered the same choices of insurance coverage as other drivers in the state – except for Physical Damage coverage (collision and/or comprehensive coverage). And chances are, you will pay more for those coverages. When you are assigned an insurer through the NE AIP, your coverage will last for three years. This is a good time to build a clean driving record, so that you may return to the more affordable voluntary market in Nebraska, and the lower premiums you will find there.
If you remain in the “high-risk driver” pool after three years, you may apply again to the Nebraska AIP or try to get car insurance quotes directly from companies. You will be treated as a new applicant, and may well wind up with a different assigned insurer.
The table below shows auto insurance coverages that are required in Nebraska. While you may be tempted to purchase just the minimums, discuss with your insurance agent what level of coverage is appropriate for you given your specific financial situation. Note that a minimal level of coverage for Uninsured/Underinsured Motorists is required in Nebraska.
|Mandatory Coverage||Nebraska Required Min. Limits||Nebraska AIP Maximum Limits|
|Bodily Injury (BI)||$25,000 per person/$50,000 per accident||$100,000 per person/$300,000 per accident|
|Property Damage (PD)||$25,000 per accident||$50,000 per accident|
|Uninsured/Underinsured Motorist (UM/UIM)||$25,000 per person/$50,000 per accident||$100,000 per person/$300,000 per accident|
This table contains insurance coverages that are optional in Nebraska. Higher limits of Uninsured/Underinsured Motorist coverage will be offered to you by your insurer, but you can reject the higher limits in writing. If you do decide to obtain the higher limits, they cannot exceed whatever limit you choose for your Bodily Injury coverage.
|Optional Coverage||Nebraska AIP Min. Limits||Nebraska AIP Maximum Limits|
|Medical Payments Coverage||$1,000 per person / accident||$5,000 per person / accident|
According to the Nebraska Department of Insurance, your assigned insurer does not have to offer either of the two Physical Damage coverages to drivers in the AIP. Feel free to talk with your insurer about what this coverage might cost, but be aware that legally, they don’t have to provide it to you.
Nebraska AIP Premiums and Payments
In general, auto insurance premiums for high risk drivers tend to be higher than the premiums for safer drivers. Insurers pool certain driver groups into this category based on their driving records and other characteristics, by the many years of experience they have paying out claims to different types of drivers. Auto insurers know that this group tends to have more incidents and file more claims, and so they charge them more for insurance to begin with. This remains true for high-risk drivers who are assigned to an insurer by the AIP. While there is no hard-and-fast rule for how MUCH more your Nebraska AIP policy will cost, it pays to know what factors most insurers examine when they determine what to quote you.
Nebraska insurers offer several ways to pay your auto insurance bill. You can pay the full annual premium up front when you submit your application. Or you can put down a deposit of 30% of the entire annual premium with the application, and pay the balance within 30 days of receiving your policy. Finally, there’s an installment payment plan. Here you need to provide 40% of the annual premium with your application, and then you will pay the remainder in 5 equal monthly installments. Know that if you choose the installment plan, the insurer will tack on a $4 service charge to each bill.
How to Apply for the Nebraska Automobile Insurance Plan
Any Nebraska agent or broker with a valid license to transact automobile insurance in the state of Nebraska can help you understand your options and submit an application to the Plan.
If you want to learn more about Nebraska’s AIP, you can call Nebraska Department of Insurance at 1-877-564-7323. You may also visit the Nebraska AIP website: https://www.aipso.com/PlanSites/Nebraska.aspx