(MONEY Magazine) – When Bridgeport, Conn. declared bankruptcy in June, municipal bond investors got yet another reminder that the finances of some states and localities are about as secure these days as a rope bridge across the Grand Canyon. Already this year, $2.4 billion worth of munis have gone into default, up from $1.8 billion for all of 1990. But starting this month, individuals will be able to buy their own insurance to protect against losses from bond defaults; until now, you could get an insured muni only if the issuer had purchased the coverage. The administrator of the new program is the Bond Investors Association (800-472-2663), a 14,000-member nonprofit Miami Lakes, Fla. advocacy group for muni bond owners. Under the plan, your bond's interest and principal payments are guaranteed by an insurance policy from Capital Guaranty of San Francisco, rated AAA for financial soundness by Standard & Poor's. Cost: $5 a year for every $1,000 of bond face value. Put another way, you slice half a percentage point off your effective yield right from the start. That's nothing to sneeze at, and neither is this catch: Capital Guaranty will insure only bonds rated triple B or higher by the bond-rating services Moody's or S&P -- ''investment grade'' bonds, which yield less than junk munis. Still, safety-minded investors with nondiversified muni portfolios from five or fewer issuers might want to consider the coverage. Even after paying the $5-per-$1,000 charge, such investors can usually beat the yields they could earn by investing in an insured muni bond mutual fund.