Registration Service Surety Bonds Explained
Registration service surety bonds are required by some state governments to ensure that registration service providers comply with applicable state laws when registering vehicles on behalf of third parties. That includes filing all paperwork properly, paying applicable fees, and submitting truthful statements to the DMV, among others.
If the registration service provider breaks the law, the DMV or an affected client can seek compensation through a bond claim. Since surety bonds are backed by bonding companies, affected third parties can usually expect quick recourse if they have become victims of fraud.
Keep reading for an explanation of bonding costs and more information on how to submit your application. Want to ask another question? Our surety agents will gladly help you at (877)-514-5146.
Questions about Registration Service Surety Bond
What’s the cost of a 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.
What if I have bad credit?
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.
How do I apply to get a registration service surety bond?
The first step towards applying for your bond is submitting our online application. Once we receive your application, we’ll contact you with your free bond quote. If you proceed with the application, you will need to provide ownership information and sign an indemnity agreement with the surety.
One of our agents will work closely with you to answer your questions, and help you with filling out the necessary paperwork. Under normal circumstances, our turnaround is very quick, so you can expect your bond to be ready within two business days.
How are bond claims handled?
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!
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What Our Clients Have To Say?
Kimberlee AblesQuick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
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