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 your Hawaii title bond needs.
What Are They?
Purchasing a Hawaii title bond, also known as a certificate of title bond or a lost or defective title bond, is a mandatory step in obtaining a bonded title for a vehicle lacking a valid certificate of title. Without a valid title, it’s impossible to register, insure, or transfer ownership of a vehicle.
A three-year Hawaii title bond serves as the purchaser’s pledge that he or she is the vehicle’s rightful owner despite the lack of a valid certificate of title. It also ensures that funds will be available to compensate that rightful owner, if one appears while the bond is in force, for any financial loss resulting from the issuance of a bonded title.
Who Needs Them?
Anyone lacking a proper title will need to purchase a Hawaii title bond as a prerequisite for issuance of a bonded title. The most common reasons for needing to get a Hawaii title bond and a bonded title are:
- No title was provided by the seller when the vehicle was purchased.
- The seller did provide a title, but it was improperly assigned, damaged, illegible, or otherwise defective.
- The title provided by the seller was lost or stolen before the new owner could register the vehicle in his or her name.
The required bond amount (the bond’s penal sum) depends on the vehicle’s appraised value, which will be determined by the Department of Motor Vehicles.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The Hawaii title bond purchased to obtain a bonded vehicle title must remain in force for three years. During this time, the rightful owner or a lienholder could show up and be able to prove their ownership interest in the vehicle. The problem is that the vehicle could have been sold or in an accident or have lost value for some other reason. The rightful owner would then be entitled to file a claim against the Hawaii title bond and be compensated by the bonded individual (the “principal”) for their financial loss, up to the bond’s full penal sum.
When a claim is filed against the bond, the bonding company that issued it (the “surety”) will make sure that it is valid before authorizing payment. The terms of the surety bond agreement, a legally binding contract among the principal, the surety, and the “obligee” requiring the Hawaii title bond, obligate the principal to pay all valid claims.
However, in practice, the surety will often pay a valid claim and wait to be repaid by the principal. In effect, the surety advances credit to the principal for the purpose of paying a claim, but makes the payment on behalf of the principal so that the claimant receives prompt payment. Depending on the amount of the claim, it’s not unusual for the principal to be able to repay the debt to the surety in periodic installments rather than in one lump sum.
What Do They Cost?
Often, title bond prices are structured in tiers and priced at a certain amount per $1,000 coverage increments. The premium cost for title bonds in higher amounts, typically over $25,000, is a small percentage of the required bond amount. That percentage (the premium rate) depends largely on the principal’s personal credit score.
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Our surety bond professionals will get you the Hawaii title bond you need at a competitive rate.