California Traffic Violator School Owner Bond
Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your California schooling bonding needs.
What Are California Traffic Violator School Owner Bonds?
California courts can require (or allow) people who have committed certain motor vehicle offenses to remediate their legal situation by attending a DMV-approved traffic violator school, commonly referred to as traffic school.
Who Needs Them?
To operate a traffic school in California, the owner must obtain a license from DMV. Purchasing a traffic violator school owner bond is a mandatory step in the licensing process.
The California DMV (the “obligee” requiring a bond) has established two bond tiers:
- A $15,000 bond for school that offer home study or internet instruction instead of or in addition to in-person learning
- A $2,000 bond for schools not offering home study or internet options
The bond must be renewed before its expiration date. Failing to maintain an active bond in force at all times can result in the loss of the license to operate a traffic school.
How Do They Work?
In purchasing a California traffic violator school owner bond, the school owner (the bond’s “principal”) is pledging to operate in compliance with Vehicle Code sections 11202(a)(3) and 11203.5. Any violation that causes financial harm to a student enrolled in the school can result in the student filing a claim against the bond, up to the bond’s $2,000 or $15,000 coverage amount.
How Are Claims Paid?
The obligee and the principal are joined by a third party in the legally binding surety bond contract, and that’s the bond’s guarantor (known as the “surety”). That contract legally obligates the principal to pay all valid claims, and the surety guarantees that they will be paid.
The surety will investigate every claim and determine whether it is legitimate. If it is, and the surety is unable to negotiate a settlement, the surety will pay the claim initially. As the bond’s guarantor, the surety has agreed to extend credit to the principal to pay valid claims. But the principal is required, by law, to repay that debt to the surety, who is indemnified against any financial responsibility for claims. The surety will sue the principal, if that becomes necessary to recover the funds paid out on claims on the principal’s behalf.
How Much Do They Cost?
A $2,000 traffic violator school owner bond can be purchased for a small flat fee, but the $15,000 bonds are subject to underwriting. The premium rate will depend on how likely the underwriters think the principal is to incur claims and not reimburse the surety for claims paid on the principal’s behalf. While other factors are considered, the assessment leans heavily on the principal’s personal credit score.
Someone with a high credit score is presumed to be fiscally responsible and therefore a low risk to the surety, which should result in a low premium rate. The reverse is also true; a lower credit score indicates a higher risk level and warrants a higher premium rate.
The average well-qualified principal will pay a premium rate that’s in the range of one to three percent.
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Our surety bond professionals will get you the California Traffic Violator School Owner Bond you need at a competitive rate.