Bonds for Driving Schools
What are driving school bonds?
A driving school bond is a surety bond many states require as part of the licensing process to become a driving school operator. These bonds protect students’ unearned, prepaid tuition, holding driving schools accountable for any fraud or breaches of contract they may commit. Bonds also guarantee that schools abide by state laws and standards.
Driving schools instruct students how to operate motor vehicles to obtain a driver’s permit or license in their state.
Get Your Driving School Bond:
Quick Takeaways
- Many states require driving school bonds as part of the driving school operator licensing process.
- Upon signing a bond agreement, a driving school agrees to pay a premium based on the bond amount and settle claims that may arise.
- Your bond value is the maximum amount someone may receive by filing a valid claim against your bond.
- Typically, you will pay a small percentage of the bond amount required – often 1-5%.
How do bonds for driving schools work?
If a driving school breaks its bond contract in any way, costing others money or putting them in harm’s way, an individual or the state may file a claim against the surety bond.
A bond is a contract between three parties:
- Principal: Driving school
- Obligee: Government entity that regulates the industry and requires the bond
- Surety: Company that underwrites and issues the bond
Upon signing a surety bond agreement, the principal agrees to pay a premium based on the bond amount and settle claims that may arise. If someone files a claim on the bond, the surety may investigate to determine if it’s valid. If it is, they will cover the claim costs – up to the total bond amount. The principal will then need to pay them back, along with any interest and extra fees involved.
To avoid a claim against your driving school bond, ensure you read and understand the terms of your bond contract. Even if the claim is valid, you might avoid going to court by solving the issue with the claimant. If the claim settles in court, you could face devastating consequences – like a hit to your credit and difficulty getting bonded again in the future. READ MORE
Who needs a driving school bond?
If you wish to open a driving school and your state requires this type of bond, connect with a surety provider like ZipBonds. Check with your regulating state agency to determine the bond amount you need. Your state will ensure that you manage your school properly to protect students and other drivers on the road.
Your bond may cover unethical practices, such as:
- Running a commercial driving school without a license
- Falsifying documents to help students obtain a license
- Refusing to provide information as requested
- Acting against the law or industry regulations
Many states require this bond as a condition for getting a business license. If you want to operate your driving school legally, you’ll need this bond. If you try to operate your business without it, you could face serious consequences, such as fines, being unable to obtain your business license, and reputational damage.
How much do driving school bonds cost?
The cost of your premium will depend on your surety bond value. The required amount can vary substantially from state to state. For example, Connecticut may require a $1,000 bond, while Iowa and Florida require $50,000 bonds for driving schools. Your bond amount is the maximum amount someone may receive by filing a valid claim against your bond.
Typically, you will pay a small percentage of the bond amount required – often 1-5%. So if you live in Connecticut, you might pay as little as $100 if you have an excellent credit score. In Iowa, you might pay closer to $500. If you have a low credit score, you may pay a larger portion of the bond amount.
How to Get a Driving School Bond in Your State
We can help you find the right surety bond for your driving school. ZipBonds offers the fastest and most secure option for acquiring license and permit bonds. Our all-digital platform is intuitive and straightforward. Apply online or call us at 888.435.4191 to speak with an agent directly.
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.