Title Agency Bond

A title agency is required to have a license and permit surety bond to operate legally. Most states require the title agency bond. Similar to the surplus lines bond, the title agency bond protects consumers if the title agent or agency fails to perform its tasks correctly.

Requirements

Financial statements are a very important aspect of your bond application. Full disclosure is a must. The more clean-cut your statements are, the better. These statements tell bonding companies where your money is tied up, whether or not you can afford the bond rate, and how much of a risk you are.

Credit reports weren't always required to apply for a bond, but now you can't do it without one. Spouses of the principal might also be required to undergo a credit check. Your credit report will be looked at in its entirety. Although your credit score is important, it is not the sole determinant as to whether or not you will be approved for the bond. If you have terrible credit you will likely be declined; otherwise your rates will probably be high, and you may have to provide cash collateral.

Rates

Surety bond rates can vary greatly. However, knowing the market's current condition and how premiums are determined will help you know where you stand. Unfortunately due to the large number of claims in recent years, rates for surety bonds are high. Bonding companies are currently trying to regain their losses from the past few years and ensure the situation does not reoccur.

Rates also vary depending according to the bond's risk. The current market for each bond determines the risk of writing it. For example, a used car dealer bond has a moderate risk, therefore, writing a used car dealer bond is easier and more financially sound than to write a telemarketing bond. Title agency bonds also have a moderate risk, and therefore will be written more frequently and for a lesser rate than wage and welfare bonds, which have high risks.