What is a registration service surety bond?
A registration service bond is a license and permit bond that ensures that registration service providers comply with state laws and regulations. Registration service providers are businesses that assist individuals and organizations with registering their vehicles with the Department of Motor Vehicles (DMV).
In some states, registration service providers must obtain a bond before becoming licensed to provide registration processing and renewals, ownership transfers, and related services. This bond protects customers if the registration service provider engages in fraudulent activities or fails to follow state laws.
Other names for this bond may include:
- Motor vehicle registration and title service bond
- DMV registration service bond
Get Your Registration Service Bond:
- In many states, registration service providers must obtain a bond before they can become licensed to operate.
- A registration service bond protects customers if the registration service provider engages in fraudulent activities or fails to follow state laws.
- If a registration service provider violates the terms of the bond agreement, they could face costly bond claims.
How does a registration service bond work?
A registration service bond is a contract between three parties:
- Principal: The registration service provider
- Obligee: The state government that requires the bond
- Surety: The financial institution that issues the bond
If the registration service provider violates the terms of the bond agreement, such as committing fraud or misrepresenting services provided, they may face bond claims.
How much does a registration service bond cost?
The cost of a registration service bond varies by state, the bond amount required, and the registration service provider’s creditworthiness. Typically, registration service providers with good credit can expect to pay a premium of 1-5% of the bond amount. Those with bad credit may pay a higher premium.
- For example, registration service providers in California need a $25,000 bond. The bond premium typically ranges from $250 to $1,250 annually (1-5%).
How to Apply for a Registration Service Surety Bond
To apply for a registration service bond, follow these general steps:
- Determine the bond amount required by your state’s licensing agency.
- Find a reputable surety bond company that can provide the bond (like ZipBonds).
- Complete the bond application, which typically includes information about your business, personal information, and financial history.
- Provide any additional documentation or collateral required. This may vary depending on your credit history and the bond amount.
- Pay your premium.
- Once approved, the surety bond company will issue your bond and provide you with a copy. You’ll need to file the original bond with your state licensing agency to obtain or renew your registration service provider license.
Other Frequently Asked Questions
It’s still possible to obtain a registration service bond if you have a low credit score. You may need to pay a higher premium or provide additional documentation or collateral to offset the higher risk associated with the bond.
If a registration service provider violates the terms of the bond agreement by engaging in fraudulent activities or failing to comply with state laws, they may face bond claims.
The claimant (the state government or a customer) can file a claim with the surety bond company. The surety then investigates the claim to determine its validity and pays out the amount of the claim up to the bond limit if it is deemed valid. The registration service provider must reimburse the surety for the total amount paid out (plus interest and fees).
Get Your Registration Service Bond Today
ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to get bonded in a flash!
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.