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UPDATED: Mar 13, 2020
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SR22 Bond: The Basics
All About the SR22 Bond
An SR22 bond is a document that is filed with the Department of State verifying that a motorist has an adequate deposit on account with the Treasury Department to cover any damages incurred during the operation of their automobile. In states that do not require an actual insurance policy, people must have a sizable deposit at all times to cover the damages. Normally, a certificate of the deposit is enough to allow registering of an automobile. If, however, there has been a time when the deposit was used for a judgment and not replenished, the State Department will want continual proof there is enough money in case of another accident. They do routine checks to make sure you have adequate monies deposited. Failure to have the proper amount results in you needing to deposit more monies. Any time there is a change in the amount deposited there will be a notice sent to the DMV and your license can be suspended.
Benefits of SR22 Bonds
If you are in a state that permits financial responsibility other than an actual insurance policy, and take out an SR-22 bond, you may be allowed to keep a lesser amount of money deposited. You must also have a good driving record to take advantage of this. If you choose to forgo an insurance policy and opt for keeping financial responsibility, the paperwork may take up to thirty days to get to the DMV. Without proof of financial responsibility your license may be suspended and car registration revoked. An SR22 Bond is available immediately, usually filed electronically, so you are spared troubles with the DMV. You will be able to get your license and any registrations reinstated the same day you purchase the SR@@ bond. An SR22 bond is for the person, not the vehicle. This means that if you are driving a friend’s car that has had an insurance lapse, or does not have enough coverage for an accident, you are still covered under your bond.
A Required SR22 Bond
If you have failed to maintain proper car insurance the state may require an SR22 bond be filed to verify your insurance compliance at all times. Insurance companies must report any breech of the bond immediately. Most states will also require an SR22 bond if you fall into their “high-risk” pool. You will be considered high–risk if you are caught driving under the influence or if you are cited for numerous traffic violations. You will need an SR22 bond if you have been in an accident before and did not pay all the bills that came alone with it. Violations that result in the suspension of your driving privileges will also require SR22 Bonds.
Differences Between SR22 Insurance and SR22 Bond
The SR22 bond and insurance is technically used for the same purpose, to make sure that you have adequate means to pay any debt that occurs due to your automobile or driving. There are some differences though. An SR22 bond gets filed with the Department of State. SR22 insurance goes right to the DMV. A bond will require some type of money deposited in an escrow account with the State Treasury Department. It may even require periodic deposits once in place. SR22 insurance is just a form. Your insurance company files it with the DMV and notifies them immediately if your insurance coverage lapses. The SR22 bond guarantees a deposit; SR22 insurance guarantees an insurance policy. An insurance policy is usually in place on the vehicle and the bond is on the person, no matter the vehicle.
SR-22 Bond as Proof of Financial Responsibility
An SR-22 bond may also be the actual document that is kept on file and given to the motorist to show the deposit with the Treasury Department in lieu of car insurance. Not every state allows this. The deposit, or bond, is usually a sizable amount and not something the average motorist is capable of doing. If you choose this option, you will need to have a copy of the SR22 bond in your vehicle or on your person at all times.
The bond guaranteed is used to pay any expenses when you are at fault in an accident. If you are found at fault for an accident the bond will released to the other party’s insurance company. Unlike insurance, however, you will be responsible for any debts the bond did not cover. In almost all cases it is to your benefit to have car insurance instead of a bond.
SR22 Bonds are State Dependent
If you live in a state that has mandatory SR-22 Bond filings and are required to file, you will have to maintain the bond for a period of three years. There are some states that do not have SR22 requirements. Moving to one of these states will not mean that you can cancel your SR22 Bond in your previous state. You are still required to keep that bond intact for the three years. You just will not have to have one in your new state too. This means that you will have to keep monies deposited in the other state. You may be able to check with an insurance company and see if they can file an SR22 insurance form with your old state and satisfy the requirement. This may allow you to retain your monies in your own state and account.
SR22 bonds are simply a way for the state to make sure that all motorists are able to take care of any debt they incur in their vehicles. It really does not take much work to get SR22 bonds. You can have yours in your hands in no time. it takes about five minutes. Whether you go with insurance or bonds is up to you, but the most important thing is to keep them current and in place at all times. You don’t want to have the DMV pulling your license because your SR22 bond has been revoked.