Title Agent Bond: A Comprehensive Guide For Insurance Agents
This guide provides information for insurance agents to help their customers obtain a Title Agent bond.
What Is a Title Agent Bond?
A Title Agent bond (sometimes referred to as an Escrow Agent/Agency bond, Abstractor bond, or Title Insurance bond) is a government-required surety bond that title agents/agencies must purchase as a prerequisite to obtaining a professional or business license. Title Agent bonds protect insureds from financial harm if the title agent/agency violates the terms of their license by committing fraud or engaging in unfair business practices. For example, if a title agent misappropriates client funds and/or unlawfully fails to transfer a property title, then the insured could file a claim against the title agent’s surety bond to recover their losses.
Title Agent bonds must remain active for as long as the title agent/agency is licensed.
Unlike most insurance products, surety bonds protect a third party (the obligee) from acts that violate the law. When the surety company suffers a loss due to a title agent’s actions, the licensee must repay the surety company for such losses, as well as court costs (this is somewhat of a rarity) and other fees.
Who Is Required to Purchase a Title Agent Bond?
Twenty-seven states require title agents/agencies (otherwise referred to as escrow agents/agencies, abstractors, and title insurers) to be bonded. State definitions vary on who is considered a title agent, but the general job description includes searching through real estate records to determine property ownership, issuing and handling property title documents, maintaining real estate records, assisting clients with title insurance needs, and helping with any other property title related tasks requested of them. Individuals or businesses that perform such services must purchase a surety bond in states with Title Agent bond requirements.
Common exemptions to the above definitions include:
- Licensed attorneys performing their regular duties
- Real estate agents and brokers
- Banks, trust companies, savings/loan associations, and credit unions
- Home insurance companies
Who Regulates Title Agent Bonds?
State government agencies regulate Title Agent bonds based on license law written by each state’s legislature. Governments enforce the law by instituting licensing requirements like educational requirements and a surety bond. The surety bond ensures that the insureds will be compensated if the title agent/agency violates the terms of their license.
How Can an Insurance Agent Obtain a Title Agent Surety Bond?
BondExchange makes obtaining a Title Agent bond easy. Simply log in to your account and use our keyword search to find the “title agent” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensure that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required to Purchase a Title Agent Bond?
The underwriting requirements for Title Agent bonds differ by state. Some Title Agent bonds are considered low risk and are instantly issued at a consistent price, regardless of the applicant’s credit history. Other Title Agent bonds are considered to be riskier and surety underwriters will review the title agent’s personal credit to determine their eligibility and rate. The credit check is a “soft check”, so the credit review will not affect the applicant’s credit. Underwriters will consider other aspects of the title agent’s application, but credit scores and their underlying data remain the primary underwriting tool for Title Agent bonds that are not issued instantly.
How Much Does a Title Agent Bond Cost?
Low-risk Title Agent bonds can cost as low as $100 per year or $10 a month (BondExchange is the only wholesale surety company to offer monthly subscriptions).
The premium rate for Title Agent bonds subject to underwriting requirements will depend on the title agent’s credit and business experience. For example, the chart below offers a quick reference for the approximate cost of a $35,000 Title Agent bond.
$35,000 Title Agent Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $132 | $14 |
| 680 – 719 | $210 | $50 |
| 660 – 679 | $245 | $125 |
| 649 – 659 | $350 | $150 |
| 629 – 648 | $525 | $250 |
| 600 – 628 | $875 | $350 |
| 580 – 599 | $1,225 | $50 |
| 550 – 579 | $1,400 | $125 |
| 525 – 549 | $1,750 | $150 |
| 500 – 524 | $2,100 | $250 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
What Information Is Collected for a Title Agent Bond Application?
Surety company underwriters will collect and review the following information to determine eligibility and rate for a Title Agent bond:
- Applicant’s legal name, date of birth (if applicable), address, and phone number
- Years in business
- Contact phone number
- Owner(s) name, address, and social security number (if subject to underwriting)
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Title Agents File Their Bonds?
Surety bond companies will provide the title agent/agency with a completed surety bond to be filed with the relevant government agency either online when submitting their license applications or by mail.
Surety companies should include the following information on most bond forms:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name, address, and phone number
- Required bond amount
- Signatures of the surety representative
- Date the bond is effective and issued
- Corporate seal of the surety company
- Power of Attorney
What Can Title Agents/Agencies Do to Avoid Claims Against Their Bond?
To avoid claims against their bonds, title agents/agencies must follow all license regulations in their state. Best practices for avoiding claims include:
- Not committing negligent acts
- Not engaging in acts of fraud
- Not participating in unfair business practices
- Paying/transferring all funds and/or property title documentation owed to insureds
What Other Insurance Products Can Agents Offer Title Agents/Agencies?
Most states do not require title agents/agencies to purchase any form of liability insurance as a prerequisite to obtaining a license (excluding a select few). However, reputable title agents and title agencies will purchase liability insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other forms of insurance, but our agents often utilize brokers on these lines. A list of brokers can be found here.
Which States Require Title Agents/Agencies to Purchase a Surety Bond?
The following states require title agents/agencies, escrow agents/agencies, abstractors, and title insurers to purchase and maintain a surety bond (click on the state for a comprehensive guide on the bond requirement).