Motor Vehicle Rental Company Bond
Most states don't require a motor vehicle rental company to acquire a bond before allowing them to conduct business - but a few do. If the surety bond requirement applies to you, read on to learn everything important.
What is a Motor Vehicle Rental Company Bond?
This type of commercial bond is a way to ensure that a motor vehicle rental company conducts business according to all state laws and standards of conduct. If a business does not follow those requirements, the motor vehicle rental company bond holds them financially accountable.
How does a Motor Vehicle Rental Company Surety Bond work?
If the misconduct of a motor vehicle rental company hurts a customer in some way, that person may file a claim against the bond seeking financial compensation equal to the amount of damages caused. As long as the rental company did in fact engage in unlawful behavior, the surety company quickly pays the claim in full. After settling the claim, the surety company will use whatever legal means necessary to collect the amount of the claim (plus interest and fees) from the bonded party (the rental company). The final financial responsibility always falls to the rental car company owner.
Who should get a Motor Vehicle Rental Company Bond?
At the time of writing, only Missouri, Connecticut, and Vermont require upstart businesses to get a motor vehicle rental company surety bond. That number could grow however, and rental companies in other states may need other types of surety bonds to conduct business legally. If you're unsure whether you need a surety bond, contact Viking Bond Service for one-on-one assistance.
Who are the parties involved in a Motor Vehicle Rental Company Bond?
Unlike an insurance agreement, which involves the policy holder and the insurance company, this and all other kinds of surety bond agreements involve an additional party. Here's how it works:
- The principal is the owner of the rental company. By law, that person must obtain a bond valued at a specific amount, keep the bond active for as long as the business is open, and pay for any claims filed against the bond.
- The obligee is any party who may be negatively impacted by the misbehavior of the principal. As the obligee, that person has the right to file a claim seeking damages knowing that payment is guaranteed.
- The surety is the company that issues the bond. If a principal is unable or unwilling to settle a claim, the surety will always step in to pay the obligee. When that happens, through, the principal must pay the surety back with penalties in the form of interest and fees.
How much does a Motor Vehicle Rental Company Bond cost?
That depends on the state and the applicant. Each state dictates how large the bond must be - eg. the total amount the surety company agrees to pay out in claims. The cost for that bond is a small percentage of the total, but the exact amount depends on the applicant's credit score, financial history, and business strength. Viking Bond Service is committed to getting everyone a fair rate, and we have a special program to help applicant's with credit issues.
How are claims handled for Motor Vehicle Rental Company Surety Bond?
The surety will only settle a claim after investigating the details. The goal is to verify that everything outlined in the claim is true so that surety companies don't pay false claims or penalize rental companies that have done nothing wrong. If the surety settles a claim, the principal must pay the surety back an equal amount including interest and fees.
How to apply for a Motor Vehicle Rental Company Bond?
To apply, submit a standard bond application. You will need to enter basic information about your business, background, and financial history. You must also submit to a credit check. Be aware that the surety may ask for additional documentation to complete your application. Get a quote back within 24 hours by applying with Viking Bond Service.
Viking Bond Service - Offering the Bond You Need
Since so few states require a motor vehicle rental company bond, few surety companies offer it. But Viking Bond Service does - along with everything you need to make the bonding process fast, easy, and affordable. If you have more questions, contact us at 1-888-278-7389 or through the contact form on this page. If you're ready to get a motor vehicle rental company surety bond ASAP, complete this online application at your own convenience.
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