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California Utility Bond

Some California utility customers - e.g. people who need electricity, gas, water or other utilities - may need to secure a specific type of surety bond before the utility company agrees to extend service. This page covers everything important about the California utility bond requirements.

What is a California Utility Bond?

If a utility company in California believes a customer may be at risk of not paying their bills - because of a history of non-payment or because they're an especially large utility consumer - that person may be required to get a California utility bond. If that person later fails to pay a utility bill, the utility company may file a claim against the surety bond seeking compensation equal to the unpaid debt. The bond functions as a way to hold utility customers accountable for unpaid bills, and provide a mechanism for utility companies to recoup their losses when extending services to risky customers.

How does a Utility Bond in California work?

If a utility company files a claim against the surety bond, the company that issues the bond pays to settle the claim - essentially guaranteeing payment for any valid claim. Afterwards, the utility customer that failed to pay their utility bill must pay the surety bond company back whatever amount it paid to settle the claim. The bonded party always has financial responsibility - the surety merely acts as an intermediary to guarantee payment to the utility company.

Who should get a California Utility Bond?

The utility company will let anyone who needs a bond know about the requirement and the details before they agree to permit access to utilities. The bond requirement is often non-negotiable, and utilities are essential - therefore there's no reason to delay getting a bond. Receive a competitive bond quote in as little as 24 hours through Viking Bond Service.

Who are the parties involved in a Utility Bond in California?

There are three parties involved:

• The Principal - The utility customer. The principal is required to get a bond and required to pay for all claims.
• The Obligee - The utility company. The obligee may file claims against the bond seeking compensation for the principal's unpaid utility bills.
• The Surety - The bond company. The surety bonds the principal and guarantees payment to the obligee. When the surety pays, the principal must pay that same amount back with interest and fees added.

How much does a California Utility Bond cost?

The utility company decides how large the bond must be, meaning the maximum amount the surety agrees to pay to settle claims. The cost (called the premium) is a small percentage of the bond size. For example, a $10,000 bond might cost a few hundred dollars. Surety bond companies base the premium on the bond seeker's credit score and financial history. People with bad credit will pay slightly more, but they won't necessarily be denied for a bond. Make sure you get fair consideration and a competitive rate by working with Viking Bond Service.

How are claims handled for Utility Surety Bond in California?

The surety company that backs the bond will only settle valid claims. They will investigate any claim before issuing payment. Then, the surety company will turn its attention toward collecting the amount of the settlement (plus interest and fees) from the principal who was the cause of the claim in the first place.

How to apply for a California Utility Bond?

To get a bond, you will need to complete a standard bond application, agree to a credit check, and provide any other documents the surety company asks for. In most cases, it takes just a few minutes to complete the application process. Expect things to be quick and easy through Viking Bond Service.

Viking Bond Service - Utility Surety Bonds Across California

Get the bond you need so that you can get the utilities you need even more. Complete an online bond application whenever you're ready. Or, if you have questions, call us at 1-888-278-7389, or write to us through the contact form on this page. However you choose to get started, count on Viking Bond Service to make things simple and affordable.