Surety bonds, cash deposits and self-insurance instead of a policy

Yes, several states let a driver satisfy the financial responsibility requirement without buying an auto insurance policy. The usual alternatives are a surety bond, a cash or securities deposit with a state office, and, for owners of larger fleets, a certificate of self-insurance. All three are promises to pay judgments caused by your driving, up to a stated amount. None is insurance: they do not defend you, they do not cover your own injuries or your own car, and the money behind them is yours, tied up or at risk. That is why few individuals use them.

The rules sit in each state's motor vehicle financial responsibility statutes, and they differ in dollar amounts, who holds the money, and who may use each option. This article uses California, Texas, Florida and New York as worked examples, explains what the arrangements leave out, and shows how a person hurt by a bonded, deposited or self-insured driver actually collects. The figures are as published by each state as of November 2026 or the date noted; confirm current amounts with the state before relying on them.

What the law actually requires

Most states now require liability insurance as a condition of registering and driving a car. The older and broader idea behind those laws is financial responsibility: proof that a driver can pay for harm they cause. A policy is the most common proof, but statutes written under that idea often list other ways to show it. New Hampshire is the best-known state that leans on the financial responsibility idea rather than a pure mandate; see Financial responsibility vs mandatory insurance: New Hampshire and States without a true mandate: New Hampshire and Virginia's old fee.

California's Department of Motor Vehicles says on its insurance requirements page that the acceptable types are a motor vehicle liability insurance policy, a $75,000 cash deposit with DMV, a DMV-issued self-insurance certificate, and a $75,000 surety bond from a company licensed to do business in California. The same page notes that collision and comprehensive coverage do not satisfy the requirement, which tells you what the requirement is about: liability to other people, not repair of your own car. The older version of that DMV fact sheet showed $35,000 for the deposit and bond; an Assembly committee analysis in April 2024 said the amounts would rise to $75,000 on January 1, 2025. Many websites still repeat the old number.

The options side by side

Sources: California DMV; Texas Transportation Code sections 601.121, 601.122, 601.123 and 601.124, as published on a statute mirror in 2025; the 2025 Florida Statutes, section 324.031; New York Vehicle and Traffic Law sections 312, 314 and 316. Use state car insurance requirements lookup and your state's motor vehicle agency to see which options your state offers.

Surety bonds

A surety bond involves three parties: the person who must prove financial responsibility (the principal), the company or individuals who guarantee payment (the surety), and the people the guarantee protects, here anyone harmed by the principal's driving. If a judgment is entered against the principal and not paid, the surety is on the hook. In the ordinary arrangement the surety then looks to the principal for reimbursement, which is why a bond is not insurance: the company is lending its credit, not taking on your risk.

How that plays out differs by state.

California accepts a $75,000 bond from a surety company licensed in the state. DMV points people to the Department of Insurance to find companies that issue bonds. Bond premiums are priced by the surety, often with collateral or a credit review, so the price depends on the applicant. This article does not quote any, because no source reviewed gives a reliable figure.

Texas takes a more old-fashioned approach. Under section 601.121, a person can file a bond with at least two individual sureties, each owning real property in Texas that is not exempt from execution. The bond must be conditioned for payment in the same amounts and under the same circumstances as a motor vehicle liability policy would require, cannot be canceled before the sixth day after the department receives notice, and must be approved by the department. The sureties' combined equity in the property must be at least twice the bond amount. The bond becomes a lien in favor of the state on that property, and the lien exists in favor of a person who holds a final judgment against the principal. In plain terms, someone's house is pledged behind the promise.

A bond is only as good as the surety. In Texas the property sits in the statute itself, so a crash victim holding a judgment can look to it. In California the surety is a licensed company, which puts the strength of the guarantee in the company's finances.

Cash and securities deposits

A deposit turns the promise into money sitting in an account.

• California: $75,000 deposited with DMV.
• Texas: under section 601.122, $55,000 deposited with the comptroller in cash, or in securities of a type that savings banks or trust funds may legally buy, with a market value equal to the required amount. The comptroller will not accept the deposit without evidence that no unsatisfied judgment of any kind exists against the depositor in the county where they live. The comptroller holds the money to satisfy an execution on a judgment for bodily injury or property damage resulting from the vehicle's use after the date of the deposit, and the money is otherwise not subject to attachment. A second route, section 601.123, allows a deposit of at least $55,000 in cash or a cashier's check with the county judge of the county where the vehicle is registered.
• New York: under section 314, money or securities delivered to the DMV commissioner go into the custody of the commissioner of taxation and finance. They are subject to execution to satisfy any judgment for bodily injury, death or property damage from the vehicle, within the same limits that apply to an owner's liability policy. If the deposit is otherwise attached, the depositor must immediately replace it with additional funds. The commissioner may not accept the deposit without evidence that there are no unsatisfied judgments against the person in the county clerk's office where they live.
• Florida: the 2025 statute requires, annually, a certificate of deposit of $30,000 issued and held by a financial institution, with a power of attorney held by the department that may be executed on a judgment. Section 324.031 applies the cash-deposit route to firms, partnerships, associations, corporations and other persons other than natural persons, at $30,000 times the number of vehicles, up to $120,000, and also requires those entities to carry excess insurance. The deposit amounts in these sections are written for entities, and the text reviewed sets no deposit figure for an individual.

A worked example of the cost of tying up cash

These numbers are invented to show the arithmetic. Suppose a driver in California considers the $75,000 deposit instead of a policy that would cost $1,800 a year. If the $75,000 would otherwise earn 4 percent in a savings account, the deposit gives up $3,000 a year of interest, which is more than the premium. The driver also gets no coverage for their own car, no defense lawyer, and no UM. And the deposit does not cap their exposure: if they cause a crash that produces a $300,000 judgment, the deposit is the first money reached, and the balance is still their personal debt. Run the same calculation with your own numbers and the state's current amounts before deciding anything.

Certificates of self-insurance

Self-insurance is the opposite of a deposit: instead of moving money, the owner convinces the state that it can pay claims out of its own balance sheet. The statutes in the states reviewed use the same threshold. California's DMV may issue a certificate to an applicant who has more than 25 motor vehicles registered in their name; Texas's section 601.124 and New York's section 316 use the same count.

What the agency looks for varies:

• California. Regulations require three years of audited financial statements and a net worth of at least $2,200,000, according to an April 2024 Assembly committee analysis, with annual recertification. A 2024 bill, AB 2892, would have let a fleet with 25 or more vehicles qualify with a cash deposit or surety bond in an amount the DMV set. The bill's backers said a company had lost the ability to self-certify because it no longer met DMV's net-valuation test. The Governor vetoed it on September 29, 2024, according to the bill's status page. A fleet that misses the net-worth test generally has to insure through a policy.
• Texas. The department must be satisfied that the person has and will continue to have the ability to pay judgments. The self-insurer must agree to pay the same judgments in the same amounts that an insurer would owe under an owner's policy, and the department may cancel a certificate after a hearing for cause, including failure to pay a judgment before the 31st day after it becomes final.
• New York. The commissioner may issue a certificate when reasonably satisfied that the person can respond to judgments. As a condition, the registrant pays a $1.50 fee per vehicle each year, plus an amount per vehicle set by the Motor Vehicle Accident Indemnification Corporation; see funds of last resort: assigned claims plans and judgment funds for what that corporation does.
• Government fleets. California's DMV also notes, on its financial responsibility hearing page, that financial responsibility is established where the owner or driver is the United States, the state, a municipality or their lawful agent.

Self-insurance suits large organizations such as delivery operators, transit contractors and governments. It rarely fits a household.

What none of these arrangements provide

The Texas, New York and Florida provisions quoted above are about paying judgments or satisfying an execution. None of the statutory text reviewed for this article promises a lawyer to defend the driver or any payment to the driver's own side. A policy, by contrast, commonly adds a duty to defend and a menu of first-party coverages. Compare:

Two points deserve more attention.

First, a lender usually requires collision and comprehensive coverage on a financed car, and those are physical-damage insurance coverages, not financial responsibility. A bond or deposit does not provide them, so a financed vehicle generally still needs a policy.

Second, an at-fault driver who is bonded or self-insured does not look like an uninsured driver on paper. The standard forms examined in Who UM coverage protects: passengers, pedestrians and cyclists define an uninsured vehicle as one with no liability bond or policy, and they exclude vehicles owned or operated by a self-insurer. The deposit route is not named in that wording. If you are hurt by a driver relying on one of these arrangements, ask your own insurer, in writing, how its UM part treats that driver. A claim may run against the bond, the deposit or the self-insurer, not against your own UM coverage, and the amount available may be smaller than a policy would provide.

How a crash victim claims against a bond or deposit

In most of these systems the money is reached through a judgment, not a claim form. The text in Texas lets the comptroller hold the deposit for executions on judgments, Florida's power of attorney is executable on a judgment, New York's deposit is subject to execution to satisfy a judgment, and the Texas bond becomes a lien for a person holding a final judgment.

The practical sequence:

1. Get proof of financial responsibility at the scene. Ask for the other driver's insurance information. If they say they have no policy, ask what they use to satisfy the law, and write down the answer. A California DMV fact sheet (revised December 2019) says drivers may be asked to supply a DMV authorization letter if they are a cash depositor or self-insured.
2. Report the crash and request a letter or record from the state agency that handles financial responsibility. A licensed attorney or the agency can say what is available in your state.
3. File suit before the statute of limitations runs. The bond or deposit does not extend it. Deadlines vary by state and by type of claim.
4. Obtain a judgment, or a settlement that reflects the amount available. The money is a fixed pool. If a Texas depositor has $55,000 on deposit and the judgment is $90,000, the deposit can supply at most $55,000, and the rest has to come from the driver's other assets. Several injured people can compete for the same pool.
5. Enforce the judgment against the bond, the deposit or the self-insurer under the statute. This is where a lawyer matters, because it is a court procedure, not an insurance claim.

For what collecting beyond that pool looks like, see Can they take your savings? How accident judgments are collected and caused a crash without insurance: personal liability and judgments.

Why few individuals choose this route

• Cost of capital. A deposit of tens of thousands of dollars, or the collateral behind a bond, usually exceeds years of premium.
• No coverage for yourself. The arrangements protect other people from you, not you from the other driver or from your own accident.
• No claim handling. A policy brings an adjuster and, in most liability policies, a defense. These arrangements bring a statute.
• Paperwork and tracking. The same DMV fact sheet says insurers must report private-use vehicle insurance to DMV electronically, and DMV uses those reports to monitor coverage. Someone using an alternative must deal with DMV directly and be prepared to show proof when asked.
• Availability. Not every state lists every option, and Florida's deposit amounts are written for entities rather than individuals.

No source reviewed gives a count of how many drivers use these options. The statutes and agency pages show that the options exist, not that they are common.

Questions to ask the state agency

• Which of the three options does my state offer to an individual, and which only to firms or large fleets?
• What are the current dollar amounts, and when did they last change?
• Who holds the money or bond, and what proof will the agency give me?
• Under what conditions is the deposit released or the certificate canceled?
• How would an injured person claim against it?
• Do my lender, my state registration process and my out-of-state travel accept it?

Common questions

Is self-insurance the same as driving without insurance?

No. A certificate of self-insurance is issued by the state after a financial review, and the holder is legally bound to pay judgments as an insurer would. Driving with nothing is a violation; see caused a crash without insurance: personal liability and judgments for what that means.

Can I use one of these to get an SR-22?

An SR-22 is a certificate of insurance filed by an insurer, not a bond or a deposit. Whether a state offers a different route for people required to show future financial responsibility depends on its statutes, so ask the motor vehicle agency.

Do all states allow these alternatives?

No. The four states used here list them in different ways, and the rules on who qualifies differ. Use state car insurance requirements lookup and the state's motor vehicle agency, and do not assume a rule in one state applies in another.

Can I get my deposit back?

Statutes generally include release provisions. New York's Vehicle and Traffic Law, for example, has a section titled for the release of financial security bonds and deposits. The conditions differ by state, so ask the agency before you make a deposit.

Key takeaways

• Some states accept a surety bond, a cash or securities deposit, or a self-insurance certificate in place of a policy; amounts and eligibility vary by state.
• Examples: California $75,000 for a bond or a deposit (DMV page), Texas $55,000 for a deposit (statute mirror, 2025), and more than 25 registered vehicles for self-insurance in California, Texas and New York.
• These arrangements pay judgments. They do not provide a defense, coverage for your own injuries or car, or UM.
• A victim usually has to sue and win a judgment, then reach the bond, deposit or self-insurer through the statute.
• Few individuals use them because the cost of tying up the money is high and the protection is narrow. Check current rules with the state's motor vehicle agency or a licensed attorney.