Title bonds (also known as certificate of title bonds, defective title bonds, lost title bonds, or bonded titles) are legally binding agreements between three parties: vehicle owners who do not possess the vehicle title, the government agency responsible for regulating local vehicle registration, and a surety company. The government agency usually responsible for bonded title requirements is the state Department of Motor Vehicles (DMV).
The government agency is the Obligee and establishes the bonding requirements that the vehicle owner (the Principal) must follow. The surety (also called bonding company) issues the bond and guarantees to pay out any claims against the bond.
Title bonds are required in some states to register a vehicle when the original title is lost, stolen, or defective. Some states where you need a title surety bond include California, Florida, Georgia, New York, and Texas, among others.
When the surety company issues the bond, they provide a guarantee that the bondholder is the true legal owner of the vehicle. Any individual, other than the bondholder, who can verify true ownership of the vehicle can make a claim on the bond to receive payment for financial losses.
If another individual can verify true ownership interest in the vehicle, the surety will pay out any damages up to the bond amount. Valid forms of evidence of ownership include a bill of sale, invoice, canceled check, or lien release.
The bonded title holder is ultimately liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.
Title surety bond costs vary depending on the total bond amount and the premium rate. The government agency sets the required bond amount which is usually based on the value of the vehicle. The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium.
Premium rates for title bonds typically cost between 1% and 3% of the total bond amount. Title bonds may require a credit check depending on the amount of the bond. Bonds with an amount of $10,000 do not typically require credit checks.
For bonds requiring credit checks, applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a title bond. EZ Surety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for title surety bonds in popular states.