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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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 24, 2022

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Things to Remember

  • 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 DUIPenalty Details
License revoked6 months
Jail timeBAC over .20: 10 days
BAC over .25: 15 days
BAC over .30: 20 days
up to 180 days
FineUp to $1,000
Vehicle impoundedNo law
DUI programAlcohol Diversion Program possible
Community serviceDetermined in court
Mandatory ignition
interlock device
Yes
Required to get
license reinstated
$98 min, SR22 insurance, and retake driver test
ProbationDetermined in court
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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

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