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Washington DC utility bond

You may need a Washington DC utility bond before local utility companies agree to give you access to electricity, gas, water and other utilities. Learn how this surety bond works and what it means for the person seeking the surety bond.

What is a Washington DC utility bond?

A utility surety bond in Washington DC holds someone financially responsible when they don't pay their utility bill. It also provides a way for utility companies to recover funds from customers who haven't paid. Essentially, this type of surety bond protects utility companies from the risk of unpaid bills while also holding anyone who doesn't pay accountable for repaying the utility company.

How does a utility bond work in Washington DC?

When a utility bill goes unpaid (usually after multiple months of non-payment) the utility company may file a claim against the Washington DC surety bond. The claim specifies what happened and requests compensation equal to the amount of the unpaid utility bills. When the surety agency that issues and backs the surety bond receives the claim, it launches an investigation to determine whether the claim is true. If so, the surety agency settles it immediately - valid claims are guaranteed payment even if the bonded utility customers can't or won't pay. The surety agency accepts responsibility to pay, but it doesn't accept financial liability. That always rests with the utility customer with unpaid bills. Under the surety bond agreement, the bonded party must pay the surety agency back the full amount of any claims settlement with interest and fees added to the debt.

Who needs to get a utility bond in Washington DC?

The utility company decides who needs one of these surety bonds and for what reason. Typically, individuals need one if they have a history of unpaid utility bills. Businesses may also need a Washington DC utility bond if they intend to consume a lot of utilities - eg. a factory with a huge electric bill. A utility company will not grant access to services until someone who needs a surety bond can prove they have one, so don't delay longer than necessary.

Why do you need a Washington DC utility bond?

Utility companies require this surety bond as a way to protect themselves from the financial consequences of unpaid bills. If someone has a history of nonpayment, they're considered a higher risk. LIkewise, if a company consumers a lot of utilities, one or two unpaid bills could lead to a large financial deficit. Washington DC utility bonds discourage nonpayment (since someone can't escape their obligation to pay) while ensuring that unpaid bills don't compromise utility service for everyone else.

Who are the parties involved in a Washington DC Utility Bond?

The utility company and utility customer are just two of the three parties involved.

  • Principal - The utility customer. The principal must obtain the surety bond and pay for all valid claims.
  • Obligee - The utility company. The obligee has the right to file claims against the bond seeking financial compensation for damages.
  • Surety - The surety agency. The surety pays the obligee for claims caused by the principal, but the principal must always pay that debt back.

How to apply for a Washington DC Utility Bond?

Before a surety agency can prepare a quote, it needs several things from the bond seeker: a completed bond application, a copy of the Washington DC utility bond requirements created by the utility company, and permission to run a credit check. In some cases, financial statements or additional documentation are also required.

How much does a Washington DC Utility Bond cost?

Officially known as the premium, the surety bond cost is a small percentage of the full amount. The utility company decides how large the utility bond must be. Typically, the size equates to several months of projected utility bills combined. The surety bond agency decides how much an applicant pays for a bond based on their application documents and credit history. People with bad credit will pay higher premiums and in some cases, struggle to get a surety bond at all. If you have credit issues in your past, work with Viking Bond Service to get approved at a competitive rate.

Viking Bond Service - For Washington DC Surety Bonds

Get a surety bond quote in under 24 hours from Viking Bond Service. Then get everything you need to satisfy the surety bond requirement on the way to getting your utilities activated. If you have questions or need more information, contact us through the form on this page or by calling 1-888-278-7389. Otherwise, apply for a surety bond at any time starting with this online application.

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