Financial Responsibility Bonds in Fairfield, OH
A financial responsibility bond is a type of insurance bond that helps prove the principal’s (you) ability to compensate a third party if you fail to fulfill the contractual obligations of the bond. In some states, including Ohio, obtaining a financial responsibility bond can satisfy the state’s proof of financial responsibility laws concerning legally driving a vehicle.
1st Choice Insurance is here to help you navigate the financial responsibility laws in Ohio, understand what a financial responsibility bond entails and obtain a financial responsibility law.
What Is the Financial Responsibility Law in Ohio?
In Ohio, as in many other states, it is illegal to drive a car unless you can prove your financial responsibility. Many drivers satisfy this requirement by obtaining auto insurance that includes minimum liability coverage, thus obtaining proof of financial responsibility in the form of an insurance policyholder ID card. For those who cannot or do not purchase auto insurance, Ohio state law allows drivers to establish financial responsibility through a cash bond—known as a financial responsibility bond—that must be posted with Ohio’s state treasurer. These types of bonds are regulated by the Ohio Department of Insurance.
Please note, Ohio state laws are subject to change without notice. Work with your 1st Choice Insurance agent to learn the most updated information regarding financial responsibility laws in Ohio.
How Do Bonds Work?
There are a handful of different types of bonds, and each type works somewhat differently. Simply put, an insurance bond is a contractual agreement involving three parties: the principal (purchaser of the bond), the obligee (the party benefiting from the bond), and the surety (the insurance company). While insurance bonds are not traditional insurance policies, they function as legal contracts that ensure the obligee receives compensation if the principal fails to fulfill their contractual obligations.
A financial responsibility bond operates similarly to auto liability coverage, covering third-party injuries or property damage you cause in an accident up to the purchased bond’s dollar amount. This type of bond does not cover your injuries or damages to your vehicle. Similarly, the bond covers only you, not other drivers of your vehicle or members of your household.
How Can I Get a Financial Responsibility Bond?
If you’re shopping for a financial responsibility bond, you must purchase one from an authorized insurance company, such as 1st Choice Insurance, and it must be posted with the State Treasurer of Ohio.
Reach out to 1st Choice Insurance today to learn more about financial responsibility bonds or to get a quote for how much it may cost to purchase one.
This page is intended for informational use only and should not be construed as legal or insurance advice. Work with a 1st Choice Insurance agent or legal counsel for advice.