Since you said you live in the Bay area let me remind you that California’s Compulsory Financial Responsibility Law requires every driver and owner of a motor vehicle to be financially responsible for their actions. There are four ways to accomplish financial responsibility:
- Coverage by a motor vehicle or automobile liability insurance policy;
- A cash deposit of $35,000 with the Department of Motor Vehicles (DMV);
- A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or
- A surety bond for $35,000 obtained from an insurance company licensed to do business in California.
All California drivers and owners must have at least the statutory limits of minimum liability insurance or an approved alternative way to pay for injury or property damage they may cause. Penalties are very severe for non-compliance with this section of the vehicle code.
It would appear that you are thinking of helping your son cover his car with a surety bond (#4 above) instead of the state required liability insurance policy. As to whether it is a good deal or a good idea or not, I could not tell you for certain without knowing specific details of his situation.
I do not know what assets need to be protected or your son’s total financial condition. To find out if a bond would be better than the state required liability insurance in your son's situation you and he should contact a CA insurance company that can issue the bond and discuss the whole situation.
For more consumer help on this topic try contacting the California Department of Insurance online or over the phone, 800-927-HELP (4357).Telephone Lines are open from 8:00 a.m. to 6:00 p.m. Monday through Friday, except state holidays.