Financial Guarantee Bond

[Mr. Bond]

I am looking for a financial gurantee bond. My car insurance is just getting too expensive for my family - we currently have 4 cars and the DMV said I could put up a financial guarantee bond for my insurance - But NO ONE seems to know what this is or where I can get one. Please Help!!!

[marietta68]

I am looking for a financial gurantee bond. My car insurance is just getting too expensive for my family - we currently have 4 cars and the DMV said I could put up a financial guarantee bond for my insurance - But NO ONE seems to know what this is or where I can get one. Please Help!!!

The bonds would be written in the statutory minimum amount for liability required in your state, for each driver. The bonds would have to be fully collateralized, most likely in the form of an irrevocable letter of credit, drawn on your bank. In addition to signing an indemnity agreement that promises to reimburse the bond company for any loss paid on your behalf, you'd be paying the annual bond premium and the annual bank fee for the letters of credit which, by the way, are secured at the bank with your cash deposit in an account you'd be unable to touch as long as the letters of credit were outstanding. All this for the joy of self insuring only your liability coverage in a minimum amount. Remember, you'd have no coverage for any damage to your car, whether your fault or not. So, as an example, in a state such as GA, where the minimum liability limits are 15/30/10, you'd have to tie up $40,000 times four (number of insured drivers in your household=$160,000) for as long as you self insured - BUT, keeping in mind the cost of hospitalization, etc., you can rest assured litigation would follow in the event of an accident. Guess what? You have to hire, and pay, a lawyer to defend you! Something else that would have been covered by your insurance.

Bottom line is, if you can't afford the insurance for four cars, get rid of one or more. Tell the kids to get a job. Bond companies can write these bonds but generally choose not to. Their conditions for writing them would be unattractive to you, in any case, and in the end, you'd find this was a bad decision - trust me, you can't afford this option.