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

​There are a lot of similarities between an Ohio financial responsibility bond and a named operator policy. But where a lot of confusion comes in stems from the differences between the two. For Ohio residents who need an SR22 auto insurance filing but don't own a vehicle, both are viable options. But which one should you choose to attach the SR22 filing to?


      You can find a lot of information online about a named operator policy. But financial responsibility bonds are only sold in the state of Ohio. That's why it's a lot harder to find information online about a financial responsibility bond. This article will help you understand what you need to know about the similarities and differences between the two.


Both of these types of policies tend to come into play when someone needs an SR22 state filing for auto insurance, but they don't own a vehicle that they can insure . Without a vehicle to insure you can not buy regular auto insurance. So you need either a financial responsibility bond or a named operator policy.... An SR22 filing can be attached to either policy, just like they attach to a regular auto insurance policy.


Similarities:

• Both policies serve as secondary coverage. These policies are designed for people who do not own vehicles but need liability auto insurance coverage for when they borrow someone's car, just in case the vehicle owner fails to carry the auto insurance coverage that they should be carrying. If the owner is carrying liability auto insurance as they should, the regular auto insurance policy pays claims before a named operator policy and a financial responsibility bond does.

• As mentioned before, both will work if you need an SR22 filing with the Ohio State BMV.

• Unlike regular auto insurance, both the named operators policy and financial responsibility bond only cover one person, and that's the name on the policy. No other driver is insured.

• Neither policy offers any physical damage coverage on the vehicle you are borrowing or driving. It is up to the owner of the vehicle to carry that coverage if they choose to do so. But neither comprehensive or collision coverage is offered on either one of these types of policies.

Differences 

• The financial responsibility bond is usually cheaper than a named operator's policy (but not always).

• A financial responsibility bond only offers the state minimum liability coverage and nothing else. A named operator's policy will offer higher levels of liability coverage (again not always, some companies only offer state minimum), uninsured motorist bodily injury coverage, and medical payments coverage.

• Financial responsibility bonds do not use credit as a rating factor while most named operator policies do. 92% of all auto insurance companies use credit as a factor in auto insurance rates. But that does not apply to financial responsibility bonds. With financial responsibility bonds, credit is not a factor in calculating rates. However, don't let a few dings on your credit report scare you away from a named operator policy. The difference here in price is minimal regarding a good or bad credit score.

• Named operator policies do not cover you in vehicles that you own. Of course, neither policy will cover you for physical damage on the car you are driving. But a named operator's policy will not cover you for liability coverage either if it is a vehicle that you own or a household member owns. Most financial responsibility bonds will offer state minimum liability coverage on owned vehicles. However, owning just a financial responsibility bond is a bad idea for vehicle owners! The coverage isn't nearly adequate enough. You really need a regular auto insurance policy if you own a vehicle.

Note: * Many people who own vehicles take out financial responsibility bonds to make them legal to drive in the state of Ohio. As long as the bond covers owned vehicles, then yes, you are driving legally. However, only owning of financial responsibility bond when you own a vehicle is a big mistake! For one thing, state minimum liability coverage is lousy! And also, with a bond you can not loan your vehicle to anyone and be covered. So if you only have a financial responsibility bond to cover the vehicle you own, and you loan your vehicle to someone who causes an accident, you're on the hook! So while owning a financial responsibility bond does make you legal to drive a vehicle that you own, it is still a very dumb strategy!




Summary: There's not all that much difference between the a named operator policy and a financial responsibility bond. But now that you have seen the differences between the two, you can decide which policy would be the better fit.


No matter which type of non owner's policy that you decide on, I have several companies for each type of policy that go easy on drivers who also need an SR22 filed with the Ohio state BMV. Fill out one of the two quote forms below and I will find you the company with the best rate. And as always, I handle your information personally and privately.


Get an Ohio Named Operator Insurance Quote with Lyles Insurance


Get an Ohio Financial Responsibility Bond Quote with Lyles Insurance


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Related Articles:


What is an Ohio SR22 Bond?

Understanding named operator (non-owner) auto insurance policies and how to get the best rate

Ohio SR22 Bond FAQ's

Ohio BMV Random Letter Selection Auto Insurance Check: FAQs