We are licensed in Ohio to transact auto insurance as an agency. We do not sell FR bonds in Ohio. We contacted the Ohio regulatory entity (Ohio Department of Insurance) and some of their response is included in this helpful answer.
There are two types of bonds: recourse and nonrecourse. Recourse bonds, which are less expensive, allow the insurer to recoup any money paid out in claims from the bondholder.
With a nonrecourse bond, your insurer cannot seek reimbursement from you for any claims it pays. So, you need to check the type of bond that you hold in Ohio.
It sounds as if you are aware that in Ohio when required, proof of financial responsibility for a motor vehicle maybe shown by one of the following documents:
- Insurance policy;
- Insurance identification card;
- Section A (Insurance Information) of a State Crash Report;
- Surety bond of $30,000 issued by an authorized surety company;
- BMV bond secured by real estate having equity of at least $60,000;
- BMV certificate for money or government bonds in the amount of $30,000 on deposit with the Ohio Treasurer;
- BMV certificate of self insurance, available to companies or persons who own at least 26 vehicles.
Most people choose to obtain auto insurance but some do choose to secure a surety bond.
The principal will pay a premium (usually annually) in exchange for the bonding company's financial strength to extend surety credit. In the event of a claim, the surety will investigate it. If it turns out to be a valid claim (no fraud), the surety will pay it and then turn to the principal for reimbursement of the amount paid on the claim and any legal fees incurred (Recourse Bond).
A bail bond is a type of surety bond used to secure the release from custody of a person charged with a criminal offense. Under such a contract, the principal is the accused, the obligee is the government, and the surety is the bail bondsman.
If you are interested in obtaining a surety bond instead of auto insurance in Ohio as your proof of financial responsibility then you should contact a company that offers surety bonds to get specific information about how a surety bond works in OH. They should be able to explain how the bond is paid back after a portion of it is used due to an accident in which you have liability losses that must be paid out.
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