What is a Driving School Bond?
Driving school bonds are a type of private school bonds, which are required from schools that charge fees in return for offering driving instruction. The purpose of the bond can vary slightly from state to state, but broadly, it’s in place to ensure that driving schools abide by all applicable regulations and do not defraud their clients.
Driving school bonds work much like other other surety bonds. A surety bond is a line of credit given to your business. If you breach the bond agreement, you can face a claim and be required to compensate the claimant. A typical bond agreement includes three parties: a principal (the driving school), an obligee (the state), and a surety (the bonding company).
You can start your online application process now to get your free bond quote, or you can keep reading the Q&A section below for all the facts. If you have any questions, you can always call us at (877) 514-5146.
Questions about Driving School Bond
How much does a driving school bond cost?
To calculate your premium, you need to know the exact bond amount of your surety bond. Each state has a varying requirement and the difference is substantial– from $1,000 in Connecticut to $50,000 in Florida, Illinois, and Iowa, for example.
These amounts signify the maximum sum a claimant can receive if their claim is proven in court. To get your driving school bond, you’ll only pay a small percentage of this amount, known as the bond premium. Surety bonds companies determine the cost of each applicant’s premium individually, based on a number of factors. They evaluate your business and look into the information in your credit report– mainly your personal credit score. Here are some driving school bond amounts by state, and what they will cost you based on your credit score. This table may not include every state that requires a driving school bond, so check with your local regulation authorities about the laws in your state.
|State and Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Connecticut Driver Training School Bond||$1,000||$100||$100||$100||$100|
|Ohio Driver Education School Bond and Texas Driveway Bond||$2,000||$100||$100||$100-$150||$150-$200|
|Kansas and Colorado Driver School Education Bond||$2,500||$100||$100||$100-$125||$125-$250|
|Nebraska Driver School Education Bond||$3,000||$100||$100||$100-$150||$150-$300|
|Virginia and New Mexico Driver Education School Bond||$5,000||$100||$100-$125||$125-$250||$250-$500|
|Tennessee Driver Education School Bond||$7,500||$100-$112,5||$100-$187,5||$187,5-$375||$375-$750|
|California, Georgia, Illinois, Massachusetts, Minnesota, Nevada, New Jersey, South Carolina, Texas, Wisconsin Driver Education School Bond||$10,000||$100||$100-$250||$250-$500||$500-$1,000|
|Connecticut Driving School Education Bond||$15,000||$112,5-$225||$150-$375||$375-$750||$750-$1,500|
|Michigan and Minnesota Driver School Education Bond||$20,000||$150-$300||$200-$500||$500-$1000||$1,000-$2,000|
|North Carolina,Driving Training School Bond||$30,000||$225-$450||$300-$750||$750-$1,500||$1,500-$3,00|
|Florida Driver License Testing Bond, Illinois Driving School Bond and Iowa Driver Education School Bond||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
As you can see, premiums for applicants with good credit are generally in the 1%-3% range. Remember, though, that in addition to your personal credit score, other factors can also influence your premium, such as your financial status and years of experience in the same industry. Read more on our What Does a Surety Bond Cost? page.
Can I get a driving school bond if I have bad credit?
The surety bonds company which underwrites your driving school bond carries legal responsibility for your claims. If you trigger a claim, they must step in and compensate the claimant at first, before seeking reimbursement from you.
For this reason, they can sometimes be unwilling to underwrite your bond if your credit score is severely compromised, or there are major issues in your credit report, such as recent delinquencies or past due times. All of these are associated with a higher risk for the underwriter. To compensate for this, they ask for higher premiums, generally in the 5%-10% range.
Lance Surety Bonds has a bad credit surety bonds program through which 99% of applicants can successfully get bonded. Our agents will also help you with your application in a way that is most likely to result in a lower premium.
How do I apply for a driving school bond?
Lance Surety Bonds offers a fast and simple online application process. After you submit your application, we’ll contact you with a free bond quote. If you choose to proceed, we’ll be in touch with you regarding all the additional documentation we’ll need.
Each underwriter has a specific set of requirements, so your full application process may be a bit different. The surety will likely require personal and business financial statements, a resume, and as an industry standard, signing an indemnity agreement with the bonding company.
Call us at (877) 514-5146 if you need more information about your application and we’ll be happy to help!
What happens in case of a claim?
There are a number of situations that can result in a claim. It’s essential that you read your bond agreement, as the bond language varies by state. You need to know which statutes and regulations pertain to your industry, so you and your staff can be sure you’re compliant.
If you are facing a claim, there are a few courses of action. If you know that the claim has solid grounds, it is advisable to seek an out-of-court settlement. This generally saves both time and money. A bond claim is a terrible thing for a business, because it may be impossible for them to get bonded next time they apply.
If you decide to go to court over the claim, you should be sure that you have sufficient proof that you have not committed any wrongdoing. If that’s the case, you can get your surety bonds company on board and present them with the evidence you have. If they think you have a strong case, they can help with legal assistance.