​ Ohio is the only state that carries a special type of auto insurance known as Financial Responsibility Bonds (FRB). There's not much information out there about FRB's, and much of what information is out there is inaccurate anyways. This article will explain to you exactly what a financial responsibility bond is, and what you need to know.


      One of the biggest problems is that financial responsibility bonds get confused with SR22 filings. And while they are different as apples and oranges, many people confuse them for being one in the same. I'm sure you've heard the term "SR22 Bond" before. I even use the term myself just because I understand what people mean when they say that.... But the term is quite misleading because an SR22 is a state filing. It is not a "bond" or auto insurance. An SR22 filing is something that attaches onto a bond or auto insurance.

What a Financial Responsibility Bond covers:

• A Financial Responsibility Bond gives drivers state minimum auto liability coverage on any vehicle they drive, as long as they're not using the vehicle for business/commercial purposes.
• A Financial Responsibilty Bond acts as secondary coverage in case you borrow a car from someone and cause an accident, and the vehicle owner that you borrowed the car from didn't have liability auto insurance coverage on the vehicle like they were supposed to carry (kind of a "cover your ass" thing). It also kicks in if the owner you borrowed the car from had insurance, but you caused more damage (either injuries or property damage) than what the vehicle owner's liability coverage was carrying.
• A Financial Responsibility Bond will give you state minimum liabilty coverage on a vehicle you own, or any vehicle owned by someone in your household.
• If a driver needs an SR22 state filing to keep their license from being suspended, an FRB can either attach an SR22 onto it, or substitute for an SR22 filing (as long as the insurance company files it with the Ohio BMV). Most companies simply attach an SR22 onto the FRB.

What a Financial Responsibility Bond does NOT cover:

• A Financial Resposibilty Bond does not cover any liabilty for accidents that cost more than the state minimum liability limits (more on that later).
• A Financial Responsibilty Bond does not offer any coverage whatsoever on the vehicle you're driving, whether you own it or not. Only a regular auto insurance policy with that specific vehicle insured with comprehensive and collision coverage offers that. State minimum liabilty coverage is all that you get.
• An FRB does not offer any type of uninsured or underinsured motorist coverage like a regular auto insurance policy does.
• An FRB does not offer any type of medical payments coverage like a regular auto insurance policy does.
• If you own a vehicle and choose only to carry a Financial Responsibilty Bond, you CAN NOT loan your vehicle to anyone else! I put this in bold because I've seen many people get burnt by this! If you own a vehicle while only carrying an FRB, and someone borrows your car and wrecks, YOU are on the hook for the damages, and could have your license suspended as well! This is why I strongly recommend those who own a vehicle take out a regular auto insurance policy! Yes, a regular auto insurance policy costs more than an FRB, but that's because the coverage is far greater.

     
           SR22 Filings

• As I said before, an SR22 filing is neither a bond or auto insurance. An SR22 filing is something that attaches onto either a Financial Responsibility Bond or a regular auto insurance policy.
• The best way to describe an SR22 filing is to think of it as a "tattle-tale" attachment.
• If you need an SR22 filing to either reinstate your license, or keep your license valid, an SR22 reports to the Ohio BMV that you're keeping at least the state minimum liability auto insurance coverage active. If at any time that you let either an FRB or a regular auto policy lapse or cancel during the time you're required to carry an SR22 (usually three years), the auto insurance or bond company is required by law to report it to the Ohio BMV. Once that happens, the Ohio BMV will suspend your license again until you have another SR22 filing put in place.

   Quick word on state minimum liability coverage

• State minimum auto insurance liability coverage is lousy! It's only adequate enough to cover liability for minor accidents (fender benders and very minor injuries).
• If you're at fault in a serious accident which causes major injuries, the most state minimum coverage will pay to any one person is $25,000 (one or two nights in a hospital can wipe that out). You would on the hook for the rest.
• If you're at fault in a serious accident which causes multiple injuries, the most state minimum coverage will pay to everyone total is $50,000.
• The total that state minimum liability coverage pays out for property damage is only $25,000. If you crash into a more expensive vehicle, or damage multiple vehicles, you will be on the hook once again.

Get a quote for an Ohio Financial Bond with Lyles Insurance


Get a quote on a regular auto insurance policy with Lyles Insurance


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Related Blog Articles:

Video: When Does my Ohio SR22 Auto Insurance Requirement End?

​Video: How long do you have to have an SR22 in Ohio?

​Video: Finding affordable Auto Insurance with a DUI

Ohio SR22 Bond FAQ's

How much does SR22 bond insurance cost in Ohio?

While many people are somewhat familiar with regular auto insurance policies, most people have never heard of a named operator policy (aka non-owners policy) until someone advises them that they need it. This article will help you understand exactly how a named operator policy works. It will also show you how to attach an SR22, SR50 (Indiana) or an FR44 (Virginia) state filing onto a named operator policy, if you need to carry one to get your license reinstated.  I will also give you some key tips on how to find the best rate.


   First, you need to understand clearly what a named operator auto insurance policy does:

• A named operator policy is a special type of auto insurance policy that is for people who do not own their own vehicle, but need liability auto insurance coverage for one reason or another.

• Some people are required to carry auto insurance even though they don't own a vehicle (usually a work requirement).

• Others may need this policy because they need an SR22, SR50 or SR FR44 state filing to get their license reinstated after a suspension.

• Some people just want a secondary policy to cover their ass, in case the vehicle they're borrowing may not be carrying current active liability auto insurance.

What a named operator auto insurance policy covers

• A named operator policy gives the driver liability auto insurance coverage on any vehicle they drive  (as long as it's not their own vehicle or belong to someone in their household, or used for commercial purposes).

• A named operator policy acts as a secondary policy. To best explain this, let me give an example: Let's say you have a named operator policy, and you borrow a neighbor's car..... Let's suppose you pulled out in front of someone, causing an accident (your fault).... In that case, your neighbor's auto insurance policy would be the primary insurance to pay for the other guy's injuries/property damage. If your neighbor wasn't carrying liability auto insurance like he/she should have been, or if they had insurance, but the injuries/damages were higher than the liability levels they were carrying, your named operator policy would then kick in and pay up to its limits.

• A named operator policy will always offer at least the state minimum liability coverage for the state the policyholder lives. Most policies will offer optional higher limits as well.

• Most (not all) named operator policies will also offer uninsured motorist coverage and medical payments (aka PIP) coverage. In some states, one or the other may be required

  What a named operator policy DOES NOT cover

• A named operator policy does not cover vehicles that the driver owns or anyone in their household owns. It is also not intended for use borrowing the same car on a regular basis (each insurance company has their own interpretation of that).

• A named operator policy does not cover comprehensive and collision coverage on the vehicle they are borrowing. That means that the vehicle you're driving on a named operator policy will not be covered by this policy. So, for example, if you borrow your friend Bob's Corvette for the weekend, and you crash it, a named operator policy won't cover the Corvette. Bob had better hope (no pun intended) that he has collision coverage on his regular auto policy. Otherwise, he will be very angry with you!

What if I don't own a car when I take out a named operator policy, but buy a vehicle later on?


     When this happens, it is very easy to transfer a named operator policy into a regular auto insurance policy. It is very simple to do. It only takes a few minutes to change and convert from a named operator policy to a regular auto insurance policy. All you need to do is call your agent. But it is extremely important that you make this change before driving your new vehicle.



 SR22, SR50 and FR44 state filing requirements


    If you've had your license suspended and need an SR22 filing to reinstate your license (this also applies to Indiana drivers who need an SR50, and Virginia drivers who need an FR44), a named operator policy is what you need if you do not own a vehicle (Ohio drivers have a couple other more popular options as well, but a named operator policy works nonetheless).
   Just let your agent know whatever state filing you need, and he/she will be happy to set that up for you. Not all auto insurance companies offer named operator policies. And many auto insurance companies do not write state filings either. And there are some companies who will write state filings, but charge a fortune to do it!


 *** NOTE: Indiana drivers:
Many of you will be required to carry the SR50 filing. However, you will find that most auto insurance companies do not offer the SR50 filing. They only offer the SR22 filing. Don't worry about it. You'll be fine with an SR22 instead. The good news for you is that an SR22 filing can be substituted for those who need an SR50 filing. So your best bet is to just go with that. This substitution allows you to quote with many more companies that suit your needs, and thus will probably get you a lower rate than if you only shopped with companies that offer the SR50..  On the other hand, those in Indiana who need an SR22 filing CAN NOT substitute an SR50 filing for it because the standards are higher with an SR22 filing. But for those who only need the SR50, don't worry about that higher standard. It won't apply to you. You can substitute either filing with no problem.




Finding the best rate on a Named Operator policy (with or without a state filing)

• There is really no magic sauce or secret to finding the best rates on a named operators policy. It's just a matter of looking in the right places.

• Many auto insurance companies do not sell named operator policies. And many auto insurance companies do not offer state filings. So looking in the right place is very important.

• Your best bet is to get quotes from an independent auto insurance agent. That way, you can get quotes from multiple companies at once instead of getting one quote per company at a time.

• Ideally, finding auto insurance agents who cater to high-risk drivers are going to be your best bet, whether you need the state filing or not, and whether you're driving record is clean or not. That is because the companies that cater towards high-risk drivers usually offer the lowest rates with named operator policies.

• So if you call and get quotes from independent auto insurance agents, three or four calls can get you quotes with up to 20 to 30 companies. That gives you the best chance at getting the best rate.

If you live in Ohio, Indiana, Michigan, Pennsylvania, Virginia or West Virginia, I will be happy to run you a named operator quote with the companies that I have. Simply click on your state below, fill out the short quote form, and I will you the lowest rate I have. And as always, I handle all quotes personally and privately.


 Get a Named Operator Auto Insurance Quote with Lyles Insurance



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Related Blog Articles:

Video: Basics of a Named Operator Policy

Video: Named Operator Auto Insurance with an SR22 Filing

Differences Between an Ohio Financial Responsibility Bond and a Named Operator Auto Insurance Policy

What is a Named Operator (aka non-owner) Auto Insurance Policy?