A title insurance agency company bond, also known as a title agent bond, is a surety bond required for title insurance agencies to obtain their license in certain states. The state’s Department of Insurance will usually require the bond because it guarantees that the title agency will ethically perform its job, including all tasks customers request. If an agency misleads or does anything against the state’s regulations, a claim can be filed against the bond. The bond amount will differ in each state, but our $35,000 Florida Title Insurance Agency company bond rates start at $350.
The cost of a title insurance agency company bond is a percentage of the total amount needed for the bond, usually between 1%-10%. The exact amount of bond required will depend on the regulations set by each state. For example, a title insurance agency company bond in Texas is $7,500, a title agent bond in Florida is $35,000, and can be up to $150,000 in Ohio.
The percentage of the bond amount you pay will be determined by the surety company providing the bond. Surety companies will look at an applicant’s credit score, experience in the industry, and the business’s financial statements. Of these factors, an applicant’s credit score will significantly impact the bond cost. Applicants with a higher credit score will pay closer to 1% for their bond, while applicants with a low credit score will pay closer to 10% if approved.
Every surety company will rate each business differently because they take into account a variety of factors. We’ve partnered with over 10 surety companies to ensure we’re offering our customers the best rates available on the market. If you receive a better quote, let us know, and we’ll do our best to offer you an even cheaper one!
Every state will have different requirements for when a title insurance agency needs a bond. In general, title insurance agencies must get a license from their state to do business. Usually, one of the requirements to get a license will be to obtain a title insurance agency company bond for a certain amount before a license can be given.
Getting a title insurance agency bond can be as fast as the same day an application is completed. When applying for a bond, the factors that can impact the time it takes to issue one are the size of the bond, the applicant’s credit history, and our partner’s underwriters. We may need additional documents for more significant bonds, leading to a longer processing time. In our experience, if both the customer and underwriter are responsive, we can issue the bond within a few hours of an application's completion. Additionally, we have built strong relationships with our partners and can expedite an application if a bond is needed immediately.
Each state determines the requirements for a title insurance agency. The following states require title insurance agency company bonds to get licensed as a title insurance agency: Florida, Louisiana, Maryland, Ohio, Pennsylvania, Texas, and Virginia. All these states will have different requirements, so we recommend contacting your state's Bureau of Licensing or Department of Insurance to determine the bonded amount needed and any other requirements for your license.
Title insurance agency company bonds are meant to protect the public from any acts that are illegal or unethical. For a title agency, this means that all the functions of their agency should be compliant with the regulations in their state, including how title searches are conducted, the issuing and handling of legal documents, and ensuring that all the tasks in their role are done correctly. If an agency commits an act against its state’s regulations, a claim can be filed against its bond.
Once a claim has been filed, the surety company will investigate its validity. During this process, the surety company may request more information from the principal and be obliged to make their determination. If the claim is valid, the surety company will then pay the affected parties for the claim, but only up to the bonded amount.
An important difference between insurance and bonds is that after a bond claim is paid out, the surety company will then recoup its losses from the principal. This is because the bond guarantees that the principal will fulfill their obligations, and if they do not, they are financially responsible for making it right with the surety company.