No. A car insurance policy with an SR-22 associated with it isn't sufficient for your needs. What you need is a motor vehicle surety bond, which is also sometimes referred to as a motor vehicle defective bond.
It appears that the California Department of Motor Vehicles (DMV) sent a request for you to obtain a motor vehicle bond since the lien holder of record is not available to release their interest in your vehicle, due to the company going out of business.
The California DMV told us that the bond is only one of the items they require in order for you to obtain a release of interest or lien from your lienholder.
First, the state wants you to check and make sure the lienholder didn't merge with another dealership or just change its name and so request that you go to their Financial Institutions listings and look for the company.
If you find that your lienholder is listed as "closed," you will still need to attempt a release of lien by sending a certified letter to them (using their last known legal address).
Once you've exhausted your efforts to contact the car's legal owner (lienholder), a motor vehicle surety bond will be accepted by the DMV in lieu of the release by the legal owner. The bond must be equal to the value of your vehicle and is required regardless of the value of your vehicle.
The required bond is meant to protect all possible parties, the department, you and any future owner, from any unknown defects or undisclosed claims against the ownership of the vehicle.
The DMV said that there are alternatives to the bond such as a cash deposit, certificates of deposit payable to the department, or a savings account -- all of which must be equal to the value of the vehicle.
In addition to the bond, for the release of lien on your vehicle will need:
- Evidence of an attempt to obtain the legal owner's release; this can be in the form of a returned and unopened certified letter to the last address of record.
- A completed Statement of Facts (REG 256), which requires information on the vehicle including the current retail value, and you should indicate that the legal owner is unavailable.
- A completed Application for Duplicate Title (REG 227).
- To pay fees -- generally $18 duplicate title fee and $15 transfer fee.
The motor vehicle bond you need can be obtained from most companies authorized to conduct a general surety business in California. Your car insurance company may be able to issue the bond or at least refer you to a company that can.