Final answer:
The question is about replacing a traditional liability insurance policy with a deposit at the DMV. This relates to how insurance companies use premiums to cover the cost of accidents in automotive insurance, which is different from deposit insurance in banking.
Step-by-step explanation:
The question asked seems to be about the alternative to liability insurance policy, where one can leave a deposit with the DMV instead of obtaining a policy. This scenario relates to the concept of risk pooling in automobile insurance, where, for instance, in a group of 100 drivers, premiums are collected to cover the accidents' costs.
If we analyze an example where 60 drivers have minor damages costing $100 each, 30 drivers with medium-sized accidents requiring $1,000, and 10 drivers incurring large accidents with $15,000 in damages, the total amount needed to cover these accidents is $186,000. If every driver pays a $1,860 premium, the total collected would suffice for the expenses.
This type of financial arrangement is different from deposit insurance provided by the FDIC for bank deposits, which insures each depositor's funds up to $250,000 in the event of bank bankruptcy.