Can You Pay for Auto Insurance with Bitcoin?
Last Updated on February 13, 2021
Millions of people hold bitcoin. If you’re a bitcoin holder, then you may want to pay for your auto insurance premiums with bitcoin.
Yes, some boutique insurance companies now allow policyholders to cover premiums with bitcoin. However, no major insurance company allows you to pay for auto insurance with bitcoin.
Today, we’re explaining everything you need to know about using bitcoin and other digital currencies to pay for auto insurance premiums.
Table of Contents:
- No Major Insurer Accepts Bitcoin
- Some Boutique Insurance Companies Accept Bitcoin Payments
- Use Bitcoin Debit Cards or Credit Cards to Pay for Premiums
- Why Don’t Insurers Accept Bitcoin?
- Why Insurers Could Accept Bitcoin in the Near Future
- Could Tesla Accept Bitcoin for Car Insurance?
No Major Insurer Accepts Bitcoin
Ten years from now, it’s possible all major insurance companies will accept bitcoin.
Today, however, no major insurance company accepts bitcoin. America’s largest insurance companies like GEICO, State Farm, and Allstate do not accept bitcoin payments.
Most major insurers accept multiple payment options. You can pay for car insurance via credit card, debit card, or bank transfer, among other methods.
Major insurance companies do not want to accept bitcoin payments. Bitcoin’s value fluctuates wildly, making it risky for insurers to accept. If the price of bitcoin plummets in the coming months, then your insurer may not have enough money to cover claims.
Yes, insurance companies could immediately swap BTC payments they receive into US Dollars, making it less risky to accept. However, most corporations run into banking issues. Banks may not want to deal with bitcoin.
Over time, things could change. Banks and insurers could accept bitcoin in the near future. For now, however, bitcoin remains off-limits for most insurance companies in the United States.
Some Boutique Insurance Companies Accept Bitcoin Payments
No large, mainstream insurance companies accept bitcoin as a method of payment. However, some smaller, boutique agencies have started to accept bitcoin.
New England’s Premier Shield Insurance, for example, recently announced it was accepting bitcoin for insurance premiums. Premier Shield Insurance requires policyholders to receive underwriting approval before paying premiums with bitcoin. Once the company approves you, however, you can freely pay for premiums with bitcoin.
You can find reports of other small insurance companies accepting bitcoin for premiums. These insurance companies tend to be small and regional.
Most of these companies announce bitcoin payments for the media attention – not because they see it as a valid form of payment for most customers moving forward.
USAA, meanwhile, does not accept bitcoin for payments. However, USAA allows you to add bitcoin wallets to your accounts screen. If you bank with USAA, then you can add a non-USAA account to your dashboard. USAA now lets you add Coinbase BTC wallets to your dashboard, including Coinbase wallets and Coinbase vaults. These accounts can appear on your USAA dashboard alongside your ordinary checking and savings accounts. However, you cannot technically
Use Bitcoin Debit Cards or Credit Cards to Pay for Premiums
It’s possible to indirectly pay for car insurance using bitcoin. If your insurer accepts debit and credit card payments, then you may be able to pay for premiums using your bitcoin debit or credit card.
Bitcoin debit and credit cards work in different ways. Most cards track your bitcoin balance in US Dollars, allowing you to spend US Dollars in the “real world” wherever businesses accept cards.
If you have a bitcoin debit or credit card, then try using it to pay for car insurance premiums. If your insurer has an online bill payment dashboard, then it could accept your bitcoin debit or credit card.
Try typing your bitcoin debit or credit card number into your insurer’s online payment form. It’s possible it will work, allowing you to effectively use bitcoin to pay for car insurance premiums – although you’re technically spending US Dollars.
Why Don’t Insurers Accept Bitcoin?
No major insurance company in the United States accepts bitcoin. No insurer has even announced plans to support bitcoin in the near future.
Some of the reasons insurers don’t accept bitcoin include:
Everyone Has a Bank Account, But Not Everybody Has Bitcoin: Most insurers accept premiums via bank transfer. You send money to your insurer every month from your bank, and your insurer covers your vehicle. Most people have a bank account, making this an easy payment option for most policyholders. Most policyholders do not hold bitcoin.
Risk of Hacking: Even the world’s biggest exchanges and platforms have been hacked. Yes, insurers could rely on institutional storage options and air-gapped bitcoin wallets. However, bitcoin is still not quite perfect for security.
Volatility: The price of one bitcoin is not the same from one day to the next. When an insurer charges you $1,500 per year for car insurance, it knows it’s receiving $1,500 per year. When an insurer charges you 0.02 for car insurance, it doesn’t know if that amount will be worth $1,000 or $10,000 by the end of the year.
Car Insurance Expenses Are in US Dollars: Most mechanics do not accept bitcoin. When an insurer covers your costs, it needs to pay in US Dollars – not bitcoin. If an insurer accepted all premiums in bitcoin, it would still need to cover expenses in US Dollars.
Lack of Security: If insurers accepted bitcoin, it would introduce numerous security issues. Hackers would send phishing attempts to policyholders in an attempt to steal their bitcoin via deceptive online forms. Customers would accidentally send too much or too little bitcoin – or send it to the wrong address.
Why Insurers Could Accept Bitcoin in the Near Future
Bitcoin supporters argue that insurers could easily accept bitcoin in the near future. Some of the advantages of accepting bitcoin include:
- First Mover Advantage: The first major insurer to accept bitcoin could receive significant attention from policyholders, media, and bitcoin holders.
- Low Fees: The bitcoin network allows users to cheaply transfer any amount of money.
- Transparency: All bitcoin payments are recorded on the blockchain, making it easy to verify and track payments.
As of today, insurers believe the disadvantages of bitcoin outweigh the advantages. However, that could change in the future.
Could Tesla Accept Bitcoin for Car Insurance?
In February 2021, Tesla announced plans to accept bitcoin for car payments. Tesla filed its plan with the SEC, causing bitcoin to skyrocket in value.
Tesla also purchased $1.5 billion in bitcoin, disclosing the purchase in its annual report.
As far as we know, Tesla plans to accept bitcoin in exchange for vehicles. You can buy a Tesla Model 3 using bitcoin, for example, by sending your bitcoin directly to Tesla.
If Tesla accepts bitcoin for cars, it’s possible the company will accept bitcoin for auto insurance payments as well.
Could Tesla be the first major automaker and insurance company to accept bitcoin? It’s possible.
Final Word on Paying for Auto Insurance with Bitcoin
You cannot pay auto insurance using bitcoin. No major insurance company accepts bitcoin for car insurance premiums.
However, you could indirectly pay for auto insurance premiums using bitcoin. If you find a platform offering US Dollar bitcoin debit cards or credit cards, then you could input this payment information into your insurer’s online dashboard, effectively paying for premiums using bitcoin.
It’s also possible that Tesla and other companies could accept bitcoin for insurance in the near future. No insurer has announced plans to accept bitcoin. If bitcoin continues to become more popular and accepted as a currency, however, it’s possible insurers will accept bitcoin in the coming years.