What Is a Maryland Automobile Insurance Fund Producer Bond?
If you want to register as an automobile insurance fund producer with the Maryland Automobile Insurance Fund, you will have to obtain a surety bond. The MD automobile insurance fund producer bond is among the indispensable requirements that guarantee you are fit for the job.
The goal of the bonding is to ensure that you will follow the state laws and the rules set by the Fund in your activities as an insurance fund producer. In case you transgress from your obligations, harmed parties can seek reimbursement from your bond.
This surety bond works like a contractual agreement between three parties. Your company is the principal that has to obtain the bond. The Maryland Automobile Insurance Fund is the obligee that requires the bond. The surety provides your business with the bonding and backs you financially.
Questions about Insurance Broker Bonds in Maryland
When is this bond required?
All parties that want to register with the Maryland Automobile Insurance Fund as automobile insurance fund producers have to obtain a $10,000 surety bond. It is available in the Producer Application Package. The bond ensures that you will account for and pay overall monies as set in the provisions of the statute and the binding rules of the Fund.
What is the surety bond cost?
In order to register as a Maryland automobile insurance fund producer, you have to post a $10,000 bond. The actual surety bond cost that you have to pay, however, is only a few percents of this bond amount. It is referred to as the bond premium. The typical rates are between 1% to 5% for applicants with stable finances.
There are a couple of important factors that determine the exact bond price that you will end up paying. Your surety considers your personal credit score, business financials, as well as assets and liquidity you can showcase during the bonding.
On the basis of these criteria, it determines how risky it is to get you bonded. The more solid your overall application is, the smaller your premium is likely to be.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Maryland automobile insurance fund producer bond||$10,000||$100-$150||$100-$250||$250-$500||$500-$1,000|
Can I get bonded with bad credit?
With Lance Surety Bonds, you can get the surety bond that you need even if your finances are problematic. We’ve designed our Bad Credit Surety Bonds program for applicants with low credit scores, tax liens, bankruptcies, and civil judgements.
The bonding rates for bad credit bonds are in the range of 5%-10%. The higher price compensates for the increased bonding risk. Due to our close partnerships with numerous A-rated, T-listed surety companies, though, you are still guaranteed a top bonding rate with us.
How do I get my MD automobile insurance fund producer bond?
Do you want to learn more details about how bonding works? You can review our in-depth How to Get Bonded page.
You can always contact us at (877) 514-5146 if you have further questions. Lance Surety Bonds’ experts are here to help you with your application form or queries.
What happens in case of a bond claim?
The purpose of your insurance fund producer bond is to ensure that you transfer duly the collected monies that need to be directed to the Maryland Automobile Insurance Fund. If you fail to comply with your obligations under the registration with the Fund, you can end up with a claim against your bond.
The Fund can seek a reimbursement up to the penal sum of your bond, which is $10,000. According to the bond indemnity agreement, your surety may cover the costs of proven claims at first. However, it clearly defines that you are fully liable for these payments afterwards. Thus, it’s a good idea to stay away from situations that can lead to problematic claims.
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