North Dakota Automobile Insurance Plan – ND AIP

In North Dakota – the “Peace Garden” state – you may have trouble finding auto insurance coverage if your driving record includes accidents or traffic tickets. Auto insurers view a record like this as a red flag that you may be a “high risk” for filing insurance claims in the future, and some insurance companies may choose not to cover you. If you are refused auto insurance due to a less-than-perfect driving record, you can turn to the North Dakota Automobile Insurance Plan (ND AIP). This Plan will see that you receive coverage, as long as you meet the eligibility criteria described below. In North Dakota, the state mandated minimum coverage amounts are 25/50/25 for liability insurance, 25/50 Uninsured Motorist coverage, as well as no-fault insurance.

What is the North Dakota Automobile Insurance Plan (ND AIP)?

The North Dakota AIP was created back in 1945 to help insure North Dakota drivers who couldn’t find auto insurance on their own. The goal is to ensure as many drivers as possible gets covered under adequate auto insurance so that they might drive legally in North Dakota. All auto insurers in the state must agree to help cover drivers in the Plan, if they wish to do any auto insurance business in the state at all. 

The Plan is a voluntary agreement between the state and insurance companies, and it is also known as the assigned risk plan or the high risk plan. It assigns drivers to existing North Dakota insurers, based on the market share of those insurers in the state. So for example if Allstate covers 8% of all North Dakota drivers, then Allstate will be required to cover 8% of the drivers who come through the ND AIP. 

Drivers in North Dakota are advised to consider the Plan as a last resort because premiums are usually higher through the AIP, whereas drivers have the freedom and option to choose cheap auto insurance among insurers in ND’s voluntary market. In fact there was only one driver assigned by the Plan in 2014, proving that insurers are voluntarily taking on more variety of risks. Always shop around. Note that in North Dakota, your assigned insurer can write auto insurance to cover vehicles including cars, pickup trucks, motor homes, snowmobiles and motorcycles. 

North Dakota Automobile Insurance Plan Eligibility

It doesn’t take much to be eligible for obtaining coverage through the ND AIP, but the requirements are all non-negotiable:

  1. You have been refused auto insurance coverage in North Dakota within the last 60 days.
  2. You have a valid driver’s license and a vehicle that is registered in North Dakota. 
  3. You are filling out the application truthfully and completely.

Your application for auto insurance – even through the North Dakota AIP - may not proceed if you have an unpaid auto insurance bill with a previous insurer, or have not brought your vehicle in for a requested safety inspection by the auto insurer. The good news is, if you pay that auto insurance bill and/or present your vehicle for inspection as directed, your insurance application through the ND AIP can proceed immediately. However, if you have lied or left out important facts on your application that the insurer deems as bad faith, the Plan can refuse to assign an insurer and ban you from re-applying to the ND AIP for 12 months.

North Dakota AIP Coverage

The insurance coverage that you will be offered by your assigned insurer is the same as what other North Dakota drivers have. But you may have to pay more for it. Once you are assigned an insurer through the North Dakota AIP, you will have that coverage for 3 years. This is a good time to work on improving your driving record, so that you may eventually qualify for the cheap car insurance rates in North Dakota.

Mandatory coverages that you must carry are shown in the table below. While you may be tempted to choose the minimum levels of coverage to save money, think twice. In the event of an accident, if losses exceed the coverage level that you bought, then they become your personal responsibility to pay. Talk with your insurance agent about what levels of coverage is appropriate for your specific situation.

Mandatory CoverageNorth Dakota Required Min. LimitsNorth Dakota 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 Motorist Bodily Injury $25,000 per person / $50,000 per accident $100,000 per person / $300,000 per accident
Personal Injury Protection (PIP) $30,000 per person / accident $80,000 per person / accident

The only optional auto insurance coverage in North Dakota are Comprehensive and Collision coverage – otherwise known as Physical Damage insurance. They pay for repairs of damage to your vehicle, and each exclusively coverage damage in cases of accident, theft, hit-and-run and so on. Here you choose a deductible – an amount of money that you are comfortable paying out-of-pocket first, before your insurance coverage steps in. For Comprehensive coverage, deductibles range from $100, $250, to $500. For Collision, choices of deductible are mostly the same, and also include a $1000 option. 

Optional CoverageDeductible optionsNorth Dakota AIP Limits
Collision coverage $100, $250, $500, or $1,000 Actual cash value of your car, up to $35,000
Comprehensive coverage $100, $250, or $500 Actual cash value of your car, up to $35,000

Usually, the higher a deductible you choose, the lower your premium is for this piece of your insurance policy. Note that you may buy both Comprehensive and Collision together OR you may buy Comprehensive coverage by itself. You may NOT buy Collision coverage as a stand-alone optional coverage in North Dakota.

North Dakota AIP Premiums and Payment Plans

According to the North Dakota Insurance Department, premiums for auto insurance policies through the AIP tend to cost more than the average. This is because regardless of which insurer you are assigned to, they quote you using AIP’s rates, whereas insurers usually provide competitive pricing in the voluntary market. It is therefore recommended that drivers keep trying to obtain more affordable insurance by lowering their risk as a driver.

Once you are assigned a North Dakota auto insurer, they will handle all the billings with you directly. The AIP requires all the insurers to provide assigned risk drivers with three payment options to pay the premiums. These include: 

  1. An installment plan, in which you must pay 40% of the entire annual premium up front, followed by 5 equal, monthly installments.
  2. Or, you can pay just 30% of the annual premium initially, and then the entire remaining balance within 30 days of receiving your policy.
  3. Or, you can pay the entire annual premium up front with your application, and be done with it.

Note that there is no grace period with auto insurance. If your payment does not arrive on or before its due date, your policy can be cancelled. So stay on top of this!

How to Apply for Insurance through the North Dakota AIP

All licensed auto insurance agents and brokers in North Dakota are familiar with this Plan and can advise you as to whether it’s you best option. Prepare your information so they can help you get an auto insurance quote and apply right away. 

To learn more about the North Dakota AIP, call the North Dakota Insurance Department at 701-328-2440 or check out the North Dakota Automobile Insurance Plan website.

Sources:
North Dakota Insurance Department: Auto for Consumers
North Dakota Automobile Insurance Plan site
ND AIP Biennial Report

Last Updated: January 2016

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