Bond

• Some states allow drivers to demonstrate financial responsibility with their own personal resources. In Alabama and California, for example, drivers can post a surety bond with a bonding company, or deliver a cash deposit to the Department of Motor Vehicles. The amount of the bond can vary from $35,000 in California to $50,000 in Alabama.
  
  

Liability

• Liability insurance is designed to assume just that--liability for covered events. The insurance company agrees to assume the financial responsibility for covered events in exchange for premium payments from the policyholder.
  
  

Differences

• In the case of a surety bond company or a cash deposit, the person posting the bond has no representation, while an insurance company will conduct an investigation and even provide legal defense in some cases when there is a covered event.