Understanding Ohio Financial Responsibility Bonds (SR22)

​ 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


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