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Title Bond

Title Bond

In order to legally register, drive, insure, or sell your car, you must own the vehicle title. The title proves the ownership of the car. So, what happens if your title is lost or stolen? Most states allow you to purchase a lost title bond, which will be accepted by the Department of Motor Vehicles (DMV) and the police as proof of ownership. Also known as a certificate of title bonds or defective title bonds, lost title bonds may also be required to gain a new title to a vehicle when no existing title can be presented.

What is a Title Bond?

A title bond is a surety bond that gives the owner of the bonded title the same rights and privileges as a regular vehicle title. The title surety bond establishes legal ownership of the vehicle. It also incentivizes the person claiming ownership to tell the truth in doing so. This incentive is because the bond also creates a mechanism for the bonded owner to pay any damages should another person credibly claim to be the true vehicle owner.

As the agency responsible for sanctioning and streamlining vehicle sales, the DMV needs a way to discourage people from seeking fraudulent titles and holding them accountable when they do. Lost title bonds help on both fronts. First, they make it less lucrative for people to try and get fraudulent titles by holding them financially accountable for any damages that result. Title bonds also guarantee payment to the DMV or the injured party for valid claims, which would be difficult or impossible to pursue by other means. Time has shown lost title bonds to be an effective regulatory mechanism. That's why DMVs across the country require them before issuing a replacement title.

How Does a Title Surety Bond Work?

Like any type of surety bond, a title surety bond is a legal agreement between three essential parties:

  • The Obligee is the person or agency that requires the bond. In the case of a title bond, it is the DMV.
  • The Principal is the person who is bonded.
  • The Surety is the insurance company that underwrites the bond.

A title bond protects against an individual making a fraudulent claim of car ownership. If the true owner can prove ownership, they can file a claim against the surety bond. When they do, the surety must fully investigate the claim. If it is determined the claim is valid, the surety pays the claim up to the total bond value. Then, they seek reimbursement from the principal.

Additionally, the DMV is protected by requiring a lost title bond. The bond prevents a lawsuit against the DMV and focuses any efforts to get compensation on the bondholder.

Who Needs a Vehicle Title Bond?

Anyone who owns or purchases a car or other vehicle without having the proper title should obtain a surety bond for the car title. When a vehicle is purchased that requires registration with a DMV office, the vehicle's title is used to establish and/or transfer ownership of the car. However, there are situations where verifying ownership using the title cannot be accomplished, such as:

  • An individual buys a car but does not receive the title at the time of purchase.
  • An individual purchases a car but receives a title assigned to the wrong person.
  • An individual buys a car but loses the title before the vehicle is transferred into his or her name.
  • A title is lost, stolen, or deemed defective.

When these and similar situations arise, DMV offices can require vehicle ownership to be determined using the bonded title process. This means that the current owner of the vehicle must obtain a vehicle title bond before a new title document can be created showing the correct vehicle ownership.

How Much Does a Bonded Title Cost?

As is typical when pricing surety bonds, the cost of a bonded title is dependent on the principal's bond amount and credit standing. The bond amount is determined by the DMV and is usually based on the fair market value of the vehicle in question. For many less expensive cars with relatively low bond amounts, the cost of a lost title bond is around $250, with some quotes coming in lower or higher. For more expensive vehicles with higher bond amounts, lost title bond quotes generally range from 1% to 3% of the required bond amount. This means that a vehicle with a required bond amount of $100,000 would pay from $1,000 to $3,000. Those with higher credit scores will pay a lower premium for their title bond.

How Can I Get a Lost Title Bond?

You can get your lost title bond in just minutes with Viking Bond Service. Simply complete our online bond application. We will run a credit check and get you a competitive quote in moments. It's really that simple. Once you pay the premium, you will receive your title bond.

Get Your Free Quote on a Title Bond Today!

Viking Bond Service has provided our clients with lost title bonds for over a decade. We can get you bonded quickly, keeping the process as simple as possible. We recognize that lost title bonds can be a lifesaver in a difficult situation. So, contact us online or give us a call at 1-888-2-SURETY (1-888-278-7389). We'll get you back behind the wheel with a title bond.

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