How do I create a bond for auto insurance?
Depending on your state, car insurance bonds require a phone call, paperwork, and a small fee.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Jun 22, 2023
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Jun 22, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Car insurance bonds are a legitimate alternative to traditional auto insurance in some states
- Some drivers will need an auto insurance bond to keep their license and vehicle registration intact
- Except for the voluntary SR-22 procured for self-insurance purposes, a bond for auto insurance is usually temporary
Drivers use car insurance bonds in conjunction with car insurance or as a replacement for standard car insurance. Car insurance bonds, or surety bonds, are technically known as SR-22 bonds. The ways SR-22 bonds interact with auto insurance varies by state.
There are many reasons why a driver may wish to use a bond for auto insurance. Luckily, obtaining a car insurance bond is relatively easy to do in most states and simply requires a bit of paperwork and a conversation with a car insurance bond representative.
How do drivers create car insurance bonds?
Drivers do not “create” a car insurance bond. Depending on your circumstances, an auto insurance company or a third-party surety company will develop a car insurance bond for you.
Usually, your insurance company will authorize an auto insurance bond on your behalf and electronically file any required paperwork with your state. If you must use a surety company, the company will create a bond and relay paperwork to your insurance company. From there, your insurance company will file the bond with your state.
A typical SR-22 bond process requires drivers to notify their company that they wish to obtain an auto insurance bond and fill out paperwork. Some drivers may have to pay a fee during the process.
If you are considering obtaining an SR-22 bond, contact your state’s motor vehicle department or insurance department for specific steps based on your situation.
Difference Between Traditional Auto Insurance and SR-22 Car Insurance Bonds
Usually, SR-22 bonds act as a legal document validating to a court that you have the financial resources necessary to maintain your auto insurance coverage. So, in the case of an unexpected accident, an SR-22 bond will demonstrate that you will be capable of paying out of pocket if an accident ensues damages.
With standard auto insurance, the insurance company assumes liability for an accident. In other words, auto insurance removes liability off the driver and places it on the insurance company and coverage plan. Although subjective to your auto insurance policy limits, an insurance company is responsible for paying any damages accumulated from an accident.
SR-22 bonds require drivers to set aside a significant amount of money in case of a collision. Although it is cheaper at the get-go to set up an SR-22 bond, paying out of pocket for vehicle repairs and replacements tends to be expensive.
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Who needs a surety bond for auto insurance?
Typically, the courts will order a driver to get a surety bond after one or more serious driving-related incidents. For example, if authorities arrest you for a DUI or a DWI, a court may require you to obtain a bond due to the high risk you pose to others by being on the road.
Here is a look at the most common penalties for a first-time DUI offense.
Common Penalties for a First-Time DUI Offense
| Type of Penalty for First DUI | Penalty Details |
|---|---|
| License revoked | 6 months |
| Jail time | BAC over .20: 10 days BAC over .25: 15 days BAC over .30: 20 days up to 180 days |
| Fine | Up to $1,000 |
| Vehicle impounded | No law |
| DUI program | Alcohol Diversion Program possible |
| Community service | Determined in court |
| Mandatory ignition interlock device | Yes |
| Required to get license reinstated | $98 min, SR22 insurance, and retake driver test |
| Probation | Determined in court |
After one or more serious-driving offenses, it is possible that you will be charged up to $10,000 in fines and other penalties. In this case, you will most likely need a bond since it provides a guarantee of extra liability coverage in addition to your current auto insurance policy.
You may also use an auto insurance bond if authorities catch you driving without insurance or as a legitimate self-insurance alternative to standard driving insurance. If you have been caught driving without insurance, it may be difficult to have driving privileges restored without obtaining a bond.
Additionally, some states allow drivers to self-insure as long as they have a bond, which presents proof of financial resources. If you must have a bond, your auto insurance rates will increase significantly. However, you may be able to find cheap SR-22 auto insurance in your area.
The Cost of Using a Bond for Auto Insurance
Generally, auto insurance bond costs are low. However, pricing does vary by state. Usually, drivers who use auto insurance bonds pay the most amounts to auto insurance companies. High-risk drivers are more likely to be involved in an accident. Therefore, their auto insurance rates are high.
Typically, the cost of self-insured bonds in place of standard auto insurance is determined by your credit history. Drivers with good credit tend to pay much less for a surety bond than those with poor credit.
For self-insurance bonds, you may also pay a one-time deposit to your state’s DMV. This one-time payment is usually equal to or higher than the liability insurance requirement of your state.
How long is a bond for auto insurance in place?
Auto insurance bonds are usually temporary, with the exception of voluntary SR-22 bonds procured for self-insurance purposes. While states have different auto insurance laws, auto insurance bonds usually expire after three to five years as long as the driver is not found guilty of any additional offenses.
Depending on the severity of your circumstances, a court may alter an auto insurance bond’s time frame if necessary. If you move to another state, the law still requires you to fulfill the terms of the bond in the state where it was issued.
What if I violate the terms of my auto insurance bond?
A court that orders you to secure an auto insurance bond is one that is suspicious of your driving integrity. As such, state courts take bond compliance very seriously. If you violate any terms stated in your bond, your actions imply a violation of the conditions set by the court.
If you must receive an auto insurance bond, do everything in your power to make sure you fulfill its terms and obey the law in the future.
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Insurance and Third Party Bond Companies Create Car Insurance Bonds
If you wish to pursue an SR-22 bond, you will not create one for yourself. Instead, your auto insurance or a third-party company will authorize a bond on your behalf. Car insurance bonds and auto insurance laws vary state by state, so the process may look different depending on where you live. Typically, drivers can expect to contact a bond-creating company, fill out paperwork, and possibly pay a fee
Frequently Asked Questions
Can I use a bond to meet the insurance requirements for ridesharing or delivery services?
The insurance requirements for ridesharing or delivery services, such as Uber or DoorDash, may vary. It’s recommended to check with the specific company and your state regulations to determine if an auto insurance bond can fulfill the insurance requirements for these services.
Can I switch from a bond to traditional auto insurance?
In most cases, you can switch from a bond to traditional auto insurance. However, it’s essential to consult with your insurance provider to understand the process and any potential requirements or restrictions involved in transitioning from a bond to a traditional auto insurance policy.
Can I cancel my auto insurance bond before it expires?
The ability to cancel an auto insurance bond before its expiration date depends on the regulations of your state and the terms of the bond. Some states may allow cancellation, while others may require you to maintain the bond for a specific period. It’s crucial to review the terms of your bond and consult with your insurance provider for guidance.
Do I need an auto insurance bond if I don’t own a car but still want to drive?
If you don’t own a car but still want to drive, you may be able to obtain a non-owner auto insurance policy instead of an auto insurance bond. Non-owner policies provide liability coverage when driving vehicles you don’t own. However, the availability and requirements of non-owner policies may vary by state and insurance provider.
Will an auto insurance bond cover damages to my own vehicle in an accident?
No, an auto insurance bond, including SR-22 bonds, generally does not cover damages to your own vehicle in an accident. Auto insurance bonds primarily provide liability coverage, which means they cover damages or injuries you may cause to others. It’s important to consider additional coverage options if you want protection for your own vehicle.
Can I use an auto insurance bond to reinstate a suspended license?
In some cases, an auto insurance bond, such as an SR-22 bond, may be required to reinstate a suspended license. The specific requirements for license reinstatement vary by state and the reason for the suspension. It’s important to consult with your state’s motor vehicle department to understand the exact steps and requirements for reinstating your license.
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Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.