Insurance Premium Finance Company Bond Guide
Some states require insurance premium lenders to file a surety bond as a licensing requirement. Learn how they work and where to apply for one in this guide.
Bond Overview
- Purpose: To protect customers who purchase insurance premium loans if the lender acts illegally
- Who Needs It: Companies that offer insurance premium financing in several states
- Required Amounts: $10,000–$50,000, varies by state
- Regulating Body: The state bureau, division or department of insurance
- Premium Rates: Typically $100–$500, calculated as a small percentage of the bond amount
Keep reading to learn how to navigate the bonding process for your insurance premium financing with SuretyBonds.com.
What Is an Insurance Premium Finance Company Bond?
Insurance premium finance companies issue loans to help other businesses or individuals pay for insurance premiums. A premium finance company bond is a type of surety bond required for licensing in several states.
The bond contract protects customers who purchase insurance premium loans if the business breaks financial industry regulations or acts illegally.
How Much Do Premium Finance Company Bonds Cost?
Insurance premium finance company bonds typically cost 1–5% of the total bond amount. Applicants with strong credit can expect to pay a rate of just 1% for most bonds.
For example, the state-required $50,000 Nevada premium finance company bond starts at $500 and the $35,000 Alabama premium finance company bond starts at $350.
Exact pricing varies by state and per applicant. Select your location below to learn more and get a free, personalized quote.
If you need a premium finance company bond in Georgia or New Hampshire, please call 1 (800) 308-4358. A friendly surety expert will help process your application and answer any questions.
How Do Insurance Premium Finance Company Bonds Work?
Premium finance company bonds protect consumers by creating a legal contract between three parties:
- Principal: The premium finance company
- Obligee: The state licensing authority
- Surety: The surety bond provider
If a bonded principal breaks the bond terms, the obligee or harmed consumers can file a claim on the bond. The surety will provide financial compensation up to the full bond amount. However, the premium finance company owners are ultimately responsible for refunding the surety.
How to Get a Premium Finance Company Bond
SuretyBonds.com makes getting bonded fast and easy for insurance premium financing providers. Just follow these quick steps to get your bond:
- Application: Submit an online application form.
- Quote: Receive a free quote within one business day (or instantly for select bonds)
- Purchase: Pay for your bond online or over the phone.
- File: Submit the original or digital bond documents to the obligee.
If you have any questions about the process, our surety experts are here to help. Email [email protected] or call 1 (800) 308-4358 for assistance.
How Do I Renew My Premium Finance Company Bond?
Most premium finance company bonds expire annually and require renewal. Your account manager will contact you during the renewal period with an invoice for another term. Pay your renewal premium and file any additional documentation as instructed to maintain an active bond policy. Learn more about surety bond renewals here.
