What Is a Maryland Title Insurance Agents Bond?
In Maryland as in a number of other states, insurance agents need to get licensed. An indispensable requirement for getting your Maryland title insurance producer license from the state Insurance Administration is to post a title agency bond.
Your bond serves as a layer of protection for your customers. It safeguards their interests in case you engage in any unlawful activities. The bond can provide them with a financial compensation via a proven bond claim.
Your Maryland surety bond works like a three-party contract. The principal is your insurance company that needs to obtain the bond. The Maryland Insurance Administration is the obligee that requires it. The surety is the third party that provides the bond.
Questions about Title Agency Bonds in Maryland
Who needs to obtain a title insurance agents bond?
Any entity that wants to operate as an title insurance producer in Maryland needs to obtain a license from the state Insurance Administration. You need to complete the application form and provide a set of documents.
How much does the bond cost?
The bond amount required from Maryland title insurance producers is $150,000.
This is referred to as the bond amount. It is different from your bond premium, which represents only a small percentage of this amount. If your overall finances are in good shape, the typical rates are between 1% and 5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Maryland title insurance agents bond||$150,000||$1125-$2,250||$1,500-$3,750||$3,750-$7,500||$7,500-$15,000|
How is your surety bond cost determined? It is set on the basis of your personal credit score, business finances, and any assets and liquidity you may have. You need to showcase the strength of your finances, so that your surety can assess the bonding risk. Your bond premium will be lower if your profile is strong.
Can I get a bond with bad credit?
Lance Surety Bonds can get you the bond you need even if you have problematic finances. We operate our Bad Credit Surety Bonds program, which is suitable for applicants with low credit scores, tax liens, bankruptcies, and civil judgements.
The rates you can expect are in the range of 5% to 10%. The higher percentage aims to compensate for the increased bonding risk. Still, as we have close partnerships with a number of A-rated, T-listed surety companies, we can offer you the best matching bond option for your case.
How do I apply for my bond?
Would you like to learn more about how bonding works? Our How to Get Bonded page is an excellent in-depth resource on the topic.
You can also reach us at (877) 514-5146 if you have questions or need help with your application. Lance Surety Bonds’ specialists will happily help you out.
How are bond claims handled for title insurance agents?
Unlike insurance, your surety bond is a safety net for your customers and for the authorities that control your field. In case you transgress from your legal obligations, you can get a claim on your bond. In this way, a harmed party can seek a reimbursement up to the penal sum of your bond, which is $150,000.
When a claim is proven, you are liable to cover all costs. At first, it may be your surety that pays the compensation to the claimant. However, you need to repay it fully afterwards. This means that bond claims are a serious financial threat to your business. They can also prevent you from getting bonded in the future - and they do harm your company’s reputation.