Anyone go through the process to be "bonded" instead of carrying car insurance

[evilfij]

I am not sure of the correct term in PA. Back in NY it was "bonded."

I was wondering if anyone can summarize the process. Sick of paying $1000 a year for something I have not, and probably will never use. Knock on wood.

[Exbiker]

I`m interested in peoples answers. As somebody that has been in a couple traffic incidents over my last 31/2 million miles and witnessed how others can drag you through the court system regardless as to fault. I would hate to have to spend my money defending myself against those claims.

[djturnz]

I had to buy a "bond" for my part time job, but I have never heard of it replacing car insurance.

[Bucks_Man]

A Bonding option is only available to corporations that self-insure their car fleets. Most companies are required to post a retrospective premium payment bond which guarantees premium reimbursement to the sponsoring insurance company. Claims are still handled through an insurance company but the corporation is responsible for making the actual claim payments. I don't believe this is what you are looking for.

No individual "bond" exists to replace private car insurance. If you had something like this in NY, my guess is it was something else (not a bond).

djturnz: Were you a p/t contractor? You probably had to buy a contractors license bond.

A "bond" is just a guarantee. You pay an insurance company to guarantee you will do something (i.e. complete work, pay premiums, build a bridge, etc.).

Hope this helps.

[benc4liberty]

Actually, in some states, I think you can do something like this. In MD for instance, you can(or at least you used to be able to) get out of paying for the car insurance, but it requires something like putting up $250K(or more) into an account held by a state agency. The money is yours, and it covers you like insurance, but so long as you wish to stay set up like that, you will not have access to the cash. I did some research into this about 5 years ago.

This may be different than being bonded. I'm not really sure.

[wa3ra]

It IS possible to self-insure in Pennsylvania; you must prove financial responsibilty to the DMV and they will then issue the Financial Resposiblity card with your assigned NIAC number. Frankly, however, it isn't worth the risk.

S 223.3 Proposal.
a) A person desiring to qualify as a self-insurer shall file a proposal of self-insurance with the Department
for approval. This proposal shall include the following:
(1) Application for Self-Insurance.
(2) Master self-insurance and security agreement
(3) A balance sheet and income statement which shall reflect the actual financial condition of the
person as of the last complete calendar or fiscal year preceding the date of the proposal; and in
the case of an individual or non-business entity that it truly reflects his financial condition and
income as of that time; and in the case of a corporation or partnership, it shall be certified by a
Certified Public Accountant or responsible accounting officer of the entity. Such information shall
be confidential, and the Department shall not release such information unless it has the prior
written consent of the self-insurer.
b) If a certificate of self-insurance is issued, the following information shall be filed annually with the
Department on a calendar year basis on or before March 1:
(1) Renewal Application for Self-Insurance.
(2) A balance sheet and income statement which shall reflect the actual financial condition of the
person as of the last complete calendar or fiscal year preceding the date of the proposal; and in
the case of an individual or “non-business entity” that it truly reflects his financial condition and
income as of that time; and in the case of a corporation or partnership, it shall be certified by a
Certified Public Accountant or responsible accounting officer of the entity. Such information shall
be confidential, and the Department shall not release such information unless it has the prior
written consent of the self-insurer.
S 223.4 Approval requirements.
a) No person shall be approved as a self-insurer unless it posts certain minimum collateral with the
Department to meet the duties of a self-insurer under the Act. This requirement may not apply to
government agencies or authorities.
b) The minimum required security that must be furnished to the Department is, for one secured vehicle,
$50,000, and for each additional vehicle, $10,000, up to a maximum of $1,000,000.
c) Only the following shall be accepted as valid collateral for self-insurance purposes:
(1) United States currency, including United States treasury bills, United States Treasury notes or
other negotiable obligations of the United States Government. United States Savings Bonds are
not negotiable.
(2) Evidence of escrow deposits in federal or state banks, credit unions, or savings and loan
associations if federally insured; such escrow deposits shall be established for the sole purpose
of providing security to meet the duties of a self-insurer.
(3) Irrevocable letters of credit issued by any bank in the Commonwealth or such other bank as
approved by the Department.
(4) Surety bonds issued by insurers authorized or eligible to do business in the Commonwealth.
(5) Bonds or other negotiable obligations issued by any state or subdivision or instrumentality of a
state in the United States, if not in default as to principal or interest.
(6) Corporate bonds, issued by an entity other than the proposed self-insurer, rated A or better by
Moody’s Bond Records, Moody’s Investors Service, Inc.
(7) Other security approved upon petition to the Department.
d) The Department shall hold the collateral furnished for the benefit of the person to whom the selfinsurer
is obligated.
(1) The self-insurer shall pay for all obligations incurred under the act by assets readily reduced to
liquid assets, such as demand deposits, time deposits, negotiable instruments and such other
assets which may be readily reduced to liquid form.
(2) If the self-insurer is not able to discharge its obligations, the self-insurer may petition the
Department to release such collateral posted as is necessary to satisfy the obligations of the selfinsurer.
(3) If such withdrawals from collateral are required, the self-insurer must replace the security within
72 hours from the date of withdrawal, in order to retain its certificate as a self-insurer.
e) Each self-insurer shall annually furnish to the Department a report of all claims incurred during the
preceding calendar year. This report shall be included on the Renewal Application for Self-Insurance.
f) If, based on the number of claims incurred by the self-insurer, the Department determines the
collateral furnished is inadequate, it may require additional security and more frequent report of claims
incurred.
S 223.5 Certificate.
Upon approval by the Department of a self-insurance proposal, a self-insurance certificate will be issued
to the person covered by the proposal. Such certificate shall be renewed annually, after such review as
the Department shall deem appropriate.
S 223.6 Self-insurance identification card.
A self-insurer shall issue an identification card for each vehicle covered by self-insurance as set forth in
Subchapter B of Chapter 67, Title 31.
S 223.7 Cancellation of certificate.
The Department shall cancel the certificate of self-insurance if it finds that the self-insurer has not
maintained adequate collateral or has not discharged its obligations under the Act.

[djturnz]

Not a contractor, I had to get a bond to be a Constable.

[Bucks_Man]

Not a contractor, I had to get a bond to be a Constable.

Yep, most "public officials" need to have a bond to protect the public (silly). Tax collectors, Sheriffs, Constables, etc.

[freesoul]

I am not sure of the correct term in PA. Back in NY it was "bonded."

I was wondering if anyone can summarize the process. Sick of paying $1000 a year for something I have not, and probably will never use. Knock on wood.

Yes, give Penndot $50K for the first vehicle and $10K for each additional vehicle, they hold the money, it accrues no interest. If you cause an accident than any damages you are found liable for are paid out of this money. You retain the full risk, pay for your own attorney to represent you if you are involved in a traffic accident. Good luck!

[gold cup abuser]

I am not sure of the correct term in PA. Back in NY it was "bonded."

I was wondering if anyone can summarize the process. Sick of paying $1000 a year for something I have not, and probably will never use. Knock on wood.

Um think of what you are contemplating as 'save a penny lose a dollar'

Yes you can post a self insurance bond with PennDOT and go through their process to get the certificate.

But......

You are on your own with hiring any attorney to defend you, and his minimum $150 per billable hour fees.

You are on your own in going before the plaintiffs attorney with your self-insurance certificate.

You are going to be on your own before any arbitration panel or judge if you show them that certificate.

And if the judgment against you is in excess of those policy limits, since you are self insured you will be facing liens on any and all of your personal possessions or property.

And you will be on your own if and when the plaintiffs attorney goes to the sheriff to file a writ of possession against you and your personal belongings.

From most of the insurance claims I have seen the plaintiffs attorneys will go for the face limits of the auto policy and have you go into a payment plan of some kind for a reduced amount of the judgment that they have against you. You will not be so fortunate with a certificate of self insurance.


As far as your current premium is concerned spend a few quality minutes with your yellow pages/yellow book and shop around for a new carrier.

just sayin.............


and yes I am an insurance agent and I wouldn't even do that