Re: [tips_and_tricks] Auto Bond
- As a former Deputy Sheriff and Bail Bondsman this is an easy question to answer. My answer applies to the State of Colorado. If you are in a different state that states requirements may be different.
A Bond of any kind is a guarantee secured by the Bond that any losses covered by the Bond will be paid. Either paid by the person who paid for the bond or if that person defaults then by the insurance company who issued the bond. It covers only the bond holder's liability. It does not cover the bond holders personal losses... such as his/hers personal medical or property damage. There are 2 types of Bonds that you can post with the State. One is cash directly with the State and the State will issue a Certificate of Self-Insurance for the amount of cash deposited with the State. The other is a Bond issued by an insurance company in the amount of cash deposited with the insurance company. In Colorado the minimum amount for self-insurance is $25,000.00. You must deposit that amount of cash to get the insurance company bond or the state certificate of self -insurance. If a claim is made against the bond or the certificate of self-insurance that is paid your bond or certificate is suspended until you deposit cash to bring the amount on deposit back up to the amount covered by the original bond or certificate of self-insurance. Neither of these instruments will cover your own personal losses. Those amounts come out of your own pocket. So, what is the advantage of getting a Bond from an insurance company? You will not have any on-going insurance premiums to pay. But, insurance companies are in business to make money they will charge a fee to hold the money on deposit and issue the the Bond. I do not know about the State, but I am sure they also charge a fee to issue a certificate of self-insurance.
On 1/31/2011 8:34 PM, payback217 wrote:
Does anyone know how an Auto Bond works, as oppossed to having auto insurance, with respect to the UCC-1? If you need medical attention, will the auto bond allow you to get treatments? If you damage someone elses property, or if you need your property repaired, will the auto bond allow you to get property repaired, or is it to just to discharge the liabity of any repairs and/or medical bills.
- I know the Menonite do this so they don't have to purchase insurance. The
church stands good for any claims against any of the members. Also, the church
dictates what kind of vehicles the members can drive. Nothing fancy, nothing
fast. Works for them quite well!
Does anyone know how an Auto Bond works, as opposed to having auto insurance,
with respect to the UCC-1?