Registration Service Surety Bond

Each surety bond has a total value, or a penal sum, which determines the maximum protection the bond offers to claimants. In the case of California, where this bond is most frequently required, the amount is $25,000.

When applying to get bonded, an applicant’s credit score is the first and most important item considered. Applicants with a high credit score typically pay low premiums: between 1% and 3%. Those with scores lower than 650 may see their premium go as high as 10%.

Your credit score is important because sureties use it to estimate how likely it is that you will trigger a claim. It’s a way for them to estimate their own risk when underwriting the bond. However, during the underwriting process, sureties are usually willing to consider additional information and reduce your premium. Thus, if you have strong financials, liquid assets or experience in the industry, you can submit additional paperwork to obtain a lower premium.

For more information, visit our page on surety bond costs.

Getting bonded with bad credit is possible for 99% of applicants. A low credit score makes you a high-risk applicant, thus the higher premium, but it will not be an obstacle to getting bonded. In most cases, we don’t require a co-signer, nor will you have to post collateral.

Keep in mind, however, that other items in your credit report can also be considered and they will further influence the price of the registration service surety bond.

If an applicant is going through a bankruptcy, or is late on child support payments, those are usually the instances when their surety bond application will get rejected.

It’s important to understand state laws that apply to your registration service company. Otherwise, you might end up breaking the law and being liable for a claim. For example, in California, the bond language requires registration service providers to comply with Chapter 2, Title 14, Part 2 of the Code of Civil Procedure as well as Chapter 2.5, Division 5 of the Vehicle Code.

If you’re notified of a claim, you’ll be given a timeframe within which you must pay it. Failing to pay for a valid claim will mean the surety has to reimburse the claimant. If this happens, the surety will sue you for reimbursement later.

Having a history of claims may make it impossible for you to get bonded in the future, so it’s best to avoid them completely. Inform yourself about the laws that apply to your business, and make sure to follow them.

If you still have questions about the bonding process for registration service providers, don’t hesitate to call us at (877)-514-5146. We’re looking forward to your call!