Colorado Lost Title Bond: A Comprehensive Guide
September 20, 2021
This guide provides information for insurance agents to help their customers obtain a Colorado Lost Title Bond
At a Glance:
- Average Cost: Minimum of $100 or 1.5% of the bond amount, whichever is greater
- Bond Amount: Twice the vehicle’s value
- Who Needs it: Vehicle title applicants in Colorado who do not have adequate proof of ownership
- Purpose: To ensure the rightful vehicle owner does not suffer financial harm if the title applicant does not actually own the vehicle
- Who Regulates Lost Title Bonds In Colorado: The Colorado Department of Revenue
Colorado statute 42-6-115 requires residents who never received or have lost their vehicle title to purchase a surety bond prior to obtaining their duplicate title. The Colorado legislature enacted the bonding requirement to ensure that the rightful vehicle owner will receive compensation if the title applicant does not actually own the vehicle. The bond amount must be equal to twice the vehicle’s value.
What is the Purpose of the Colorado Lost Title Bond?
Colorado requires residents to purchase a surety bond as part of the application process to obtain a duplicate title. The bond ensures that the rightful vehicle owner will not suffer a financial loss if the title applicant is seeking to obtain the title fraudulently. If the title applicant is engaging in fraud, then the rightful vehicle owner can file a claim against the bond and receive compensation up to the full amount of the bond. In short, the bond acts as a safeguard against people attempting to obtain ownership of a vehicle through unethical means.
How Can an Insurance Agent Obtain a Colorado Lost Title Bond?
BondExchange makes obtaining a Colorado Lost Title Bond easy. Simply log in to your account and use our keyword search to find the “title” bond in our database. Don’t have a login? Enroll 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 ensures 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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How is the Bond Amount Determined?
Colorado statute 42-6-115 dictates that the bond amount be equal to twice the vehicle’s reasonable value. Title applicants may determine the vehicle’s value through the following means:
- Price guide books
- Vehicle must not be older than 7 year
- Computerized valuation services
- Licensed Colorado auto dealer
- The valuation must be done on the company’s letterhead or be signed and notarized
- Must include the dealer’s license number
- Must be signed and dated
- Dealership may perform its own appraisal when bonding for the title in their name
- Certified appraisal
All appraisals must be done for the current condition of the vehicle at the time of titling.
Is a Credit Check Required for the Colorado Lost Title Bond?
Surety companies will not conduct a credit check for bonds that are less than $25,000. At limits over $25,000, surety companies will review the applicant’s credit standing to determine qualification for the bond. For larger bond amounts, applicants with poor credit may be subject to a higher rate. Generally, most carriers want to have an understanding as to how the applicant came to have ownership of the vehicle.
How Much Does the Colorado Lost Title Bond Cost?
The Colorado Lost Title Bond costs either $100 or 1.5% of the bond amount, whichever is greater (rates may vary for bonds greater than $25,000)
Who is Required to Purchase a Bond?
The Colorado Department of Revenue will require a title applicant to purchase a surety bond if they cannot determine with certainty that the applicant actually owns the vehicle. Typically, lost title bonds are required for the following reasons:
- The vehicle has never been titled
- The applicant never received the title
- The previous owner never titled the vehicle
- The applicant has the title but there is an error in the title transfer
- The applicant purchased an unclaimed/abandoned vehicle and is not a bonded agent
How do Colorado Residents Apply for a Bonded Title?
To apply for a bonded title, Colorado residents must complete the following steps:
Step 1 – Have the Vehicle Inspected
Bonded title applicants must have their vehicle inspected by a P.O.S.T certified inspector (all local motor vehicle offices can refer applicants to P.O.S.T inspectors). The inspector should complete the required form and return it to the title applicant (the inspector will supply the applicant with the form).
Step 2 – Complete the Affidavit
Colorado requires all bonded title applicants to complete an affidavit certifying that they do in fact own the vehicle. If there is an active lien on the vehicle or if another individual is listed as an owner, then the title applicant must obtain authorization from the lienholder/owner.
Step 3 – Purchase a Surety Bond
Bonded title applicants must purchase and maintain a surety bond in an amount equal to twice the vehicle’s reasonable value
How Do Colorado Bonded Title Applicants File Their Bond?
In Colorado, bonded title applicants should submit the completed bond form, including the power of attorney, to their local motor vehicle office. The Colorado Lost Title Surety Bond requires signatures from both the surety company that issues the bond and the bonded title applicant. The surety company should include the following information on the bond form:
- The legal name and address of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- Vehicle information
- Date the bond is signed
What Are the Insurance Requirements for Bonded Title Applicants in Colorado?
Colorado requires all motor vehicle owners to purchase auto insurance with the following limits:
- $25,000 bodily injury per person
- $50,000 bodily injury per accident
- $15,000 property damage
Bonded title applicants must purchase and maintain a surety bond in an amount equal to twice the vehicle’s reasonable value.
How Can Colorado Residents Avoid Claims Against Their Lost Title Bond?
To avoid claims against their bond, bonded title applicants in Colorado must ensure that they are the rightful owners of the motor vehicle.
What Other Insurance Products Can Agents Offer Bonded Title Applicants in Colorado?
Colorado requires all motor vehicle owners to purchase auto insurance. Bonds are our only business at BondExchange, so we do not issue other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.