Self-Insurance

Plain English Definition: Self-insurance means covering potential losses with your own money rather than purchasing an insurance policy.

What Self-Insurance really means for someone with an insurance policy

Self-insurance involves setting aside funds to cover future claims or expenses instead of relying on an insurance company. It is often used by businesses and individuals with substantial financial resources.

Self-Insurance Real World Examples

• A company creating a reserve fund for employee health claims instead of buying a health insurance policy.
• A homeowner choosing not to purchase flood insurance but saving money in a dedicated account for potential flood damage.
• An individual opting out of auto insurance in a state where it’s allowed, keeping savings to cover potential accidents.