Oregon Utility Bond
Utility companies that provide electricity, gas, water, or other critical services occasionally require people to obtain an Oregon utility bond before providing service. If you need this type of surety bond, read on.
What is an Oregon Utility Bond?
A surety bond is a way to hold the bonded party (in this case the person seeking services from a utility provider) financially accountable. A utility company will require someone to get a bond if that person has a history of missed payments, or if that person intends to consume large amount of utilities (e.g. a factory). Then, if the bonded party fails to pay a utility bill, the utility company may file a claim against the bond seeking damages equal to the missed payment. Bonds provide a way for utility companies to recoup their losses while also holding the bonded party responsible.
How does an Oregon Utility Bond work?
When someone misses a bill payment, the utility company may file a claim against the surety bond. As long as the claim is valid, the surety company that issues the bond agrees to automatically pay it in full - guaranteeing that utility companies receive payment for missed bills. The surety issues payment, but they do not accept liability. The bonded party is always financially responsible for all claims, which is why they must pay the surety company back for any payments the company issues - guaranteeing utility customers take responsibility for the utilities they consume.
Who should get an Utility Surety Bond in Oregon?
Most utility customers in Oregon will not need one of these bonds. Those with a history of unpaid bills or extra-large needs for a particular utility may be required to get a bond - in which case the utility company will make the requirement clear before agreeing to turn on service. When that happens, seek out a utility surety bond in Oregon immediately.
Who are the parties involved in a Utility Bond in Oregon?
The bonded party is just one of three parties involved in this bond agreement:
- Principal - The utility customer required to get an Oregon utility bond. The principal must pay for all claims filed against the bond.
- Obligee - The utility company that requires the bond and has the right to file claims against it seeking compensation for unpaid bills.
- Surety - The bond company that guarantees payment for all valid claims. Anytime the surety pays to settle a claim, the principal must pay that same amount back plus interest and fees.
How much does an Oregon Utility Bond cost?
The utility company determines how large the bond must be based on how much they might lose in unpaid bills. Bond costs, which are known as premiums, are a small percentage of the bond's total monetary value. Exactly how much an individual pays depends on their credit score and their financial record. Every surety bond provider evaluates the risk of bonding an applicant differently. Make sure you're working with one that can forgive bad credit and get more applicants approved for a utility bond in Oregon.
How are claims handled for an Oregon Utility Bond?
The surety guarantees payment for all valid claims, but first they investigate whether the details of the claim have merit. Provided they do, the surety settles the claim in full up to the dollar amount of the bond. At that point, it's the principal's (the bonded utility customer) responsibility to pay the surety back the full amount of the claim. As a way to discourage claims, the principal must also pay interest, fees, and costs as determined by the bond company.
How to apply for an Oregon Utility Bond?
When you apply for a bond, the bond company evaluates how likely you are to create claims and to pay for those claims. You will need to fill out a standard bond application with information about your finances and background. You will also need to consent to a credit check, provide a copy of the exact bond requirements, and supply any additional documentation the surety company needs. Apply in just a few minutes with Viking Bond Service, and expect to get a quote for bond premiums back within 24 hours.
Viking Bond Service - Working Across Oregon
If you require an Oregon utility bond, Viking Bond Service can get you one fast. Complete our online application at any time to get the process started. Or connect with one of our bond experts first. Have a conversation over the phone by calling 1-888-278-7389 or send your questions through the contact form on this page.
Quotes are available for clients with low credit. In many cases, a bond is not out of reach simply due to bad credit.
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