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Q

Is it possible to post a bond rather than paying for car insurance in the state of Texas? I would like to be self-insured if possible.


A

Texas law requires people who drive in Texas to be able to pay for any automobile accidents they cause. Most drivers do this by buying automobile liability insurance. According to the Texas Department Public Safety (DPS) Texans must prove financial responsibility before they can get a new driver license. Drivers renewing their licenses are not required to show proof of insurance.

For most drivers, financial responsibility means having liability insurance that meets state standards. Proof of self-insurance, government pool documents and bonds posted with the Department of Public Safety also can meet the requirements of law.

Under Section 601.051 of the Texas Transportation Code it is titled Requirement of Financial Responsibility and states that a person may not operate a motor vehicle in this state unless financial responsibility is established for that vehicle through:

(1) a motor vehicle liability insurance policy that complies with Subchapter D;

(2) a surety bond filed under Section 601.121;

(3) a deposit under Section 601.122;

(4) a deposit under Section 601.123; or

(5) self-insurance under Section 601.124.

Section 601.121 in regards to a Surety Bond states in part that (a) A person may establish financial responsibility by filing with the department a bond:

(1) with at least two individual sureties, each of whom owns real property in this state that is not exempt from execution under the constitution or laws of this state;

(2) conditioned for payment in the amounts and under the same circumstances as required under a motor vehicle liability insurance policy;

(3) that is not cancelable before the sixth day after the date the department receives written notice of the cancellation;

(4) accompanied by the fee required by Subsection (e); and

(5) approved by the department.

If you are interested in posting a surety bond than you should go on to read the rest of this section of Texas law and contact a company that offers surety bonds instead of insurance for a way to comply with the financial responsibility laws for TX.

Section 601.124 speaks of self-insurance and states that (a) a person in whose name more than 25 motor vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance issued by the department as provided by this section.

(b) The department may issue a certificate of self-insurance to a person if:

(1) the person applies for the certificate; and

(2) the department is satisfied that the person has and will continue to have the ability to pay judgments obtained against the person.

(c) The self-insurer must supplement the certificate with an agreement that, for accidents occurring while the certificate is in force, the self-insurer will pay the same judgments in the same amounts as an insurer would be obligated to pay under an owner's motor vehicle liability insurance policy issued to the self-insurer if such policy were issued.

(d) The department for cause may cancel a certificate of self-insurance after a hearing. The self-insurer must receive at least five days' notice of the hearing. Cause includes failure to pay a judgment before the 31st day after the date the judgment becomes final.

So you may be able to obtain a surety bond but unless you have 25 vehicles registered to you than you would not qualify to be self-insured in Texas. Section 601.051 also mentions deposits that you can place with the state. You can read the section of laws cited to find out more however we can tell you that with both deposits options the amount required is $55,000.

If you choose to have auto insurance instead of a bond or other form of financial responsibility in Texas than currently the minimum coverage amount required by the state's financial responsibility law is 25/50/25 which stands for $25,000 for each injured person, up to a total of $50,000 per accident, and $25,000 for property damage.

The liability limits for Texas auto insurance will increase on January 1, 2011, to 30/60/25 which stands for $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident.

If you want instead a bond than you should know that surety bonds are issued through surety bond producers, also known as agents and brokers, who are knowledgeable about the surety industry normally. Surety bond producers typically work in agencies that specialize in surety bonds or in insurance agencies that have deal in insurance policies and in surety bonds.

If you need help finding someone to issue you a surety bond you can contact the Texas Department of Insurance for consumer help.


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