Madisonville Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $1,000
- Who Needs it: All pawnbrokers operating in Madisonville, Kentucky
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbrokers in Madisonville: The City of Madisonville
Background
Madisonville Code of Ordinance 112.02 requires all pawnbrokers operating in the state to obtain a license with the City of Madisonville. The Madisonville City Council enacted the licensing requirement to ensure that pawnbrokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, pawnbrokers must purchase and maintain a $1,000 surety bond to be eligible for licensure.
What is the Purpose of the Madisonville Pawnbroker Bond?
Madisonville requires pawnbrokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will be protected from financial harm if the broker fails to comply with the regulations set forth in the Madisonville Code of Ordinance 112.03 and Kentucky Revised Statute 226.020. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the pawnbroker violates the terms of their license.
How Can an Insurance Agent Obtain a Madisonville Pawnbroker Surety Bond?
BondExchange makes obtaining a Madisonville Pawnbroker bond easy. Simply log in to your account and use our keyword search to find the “Pawnbroker” 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 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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Is a Credit Check Required for the Madisonville Pawnbroker Bond?
No, a credit check is not required for the Madisonville Pawnbroker bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers operating in the city, regardless of their credit history.
How Much Does the Madisonville Pawnbroker Bond Cost?
The Madisonville Pawnbroker bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Madisonville Pawnbroker Bond?
Madisonville requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Madisonville Code of Ordinance 112.01, a pawnbroker is a person who issues loans to individuals that leave their property, as collateral, for the broker to sell on condition that the customer may repurchase the property within a fixed period of time.
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 Pawnbrokers Apply for a License in Madisonville?
Pawnbrokers in Madisonville must navigate several steps to obtain a license. Below are the general guidelines, but applicants contact the City of Madisonville for details on the process.
License Period – All Madisonville Pawnbroker Licenses expire one year from the date of issuance and must be renewed before the expiration date.
Step 1 – Purchase a Surety Bond
Pawnbrokers must purchase and maintain a $1,000 surety bond.
Step 2 – Submit an Application
Pawnbrokers must submit their completed application to the Director of Finance by mail or in person at the following address:
City of Madisonville
P.O. Box 1270
Madisonville, KY 42431
Brokers must complete the form in its entirety and submit a $100 license fee in addition to a surety bond with their application. Applicants must obtain approval from the Hopkins County Sheriff’s Department prior to being issued a license.
How Do Madisonville Pawnbrokers Renew Their Licenses?
Pawnbrokers should contact the City of Madisonville to obtain a renewal application before their license expires. All Madisonville Pawnbroker Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Pawnbrokers in Madisonville?
Madisonville does not require pawnbrokers to purchase any form of liability insurance before obtaining a license. However, brokers may need to obtain insurance as a prerequisite to obtaining a state business license. Pawnbrokers must purchase and maintain a $1,000 surety bond.
How Do Madisonville Pawnbrokers File Their Bonds?
Pawnbrokers should submit their completed bond forms, including the power of attorney, to the City of Madisonville at the following address:
City of Madisonville
P.O. Box 1270
Madisonville, KY 42431
The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Name of the obligee and the license type applied for
- Bond amount
- Date the bond goes into effect
- Signing date of the bond
What Can Madisonville Pawnbrokers do to Avoid Claims Made Against Their Bonds?
To avoid claims on their bonds, pawnbrokers in Madisonville must ensure that they:
- Do not engage in any acts of fraud or misrepresentation
- Do not breach contracts made with consumers
- Maintain all required transaction records
- Return all pledged goods that have been paid for
- Obtain proof of identification during each transaction
What Other Insurance Products Can Agents Offer Pawnbrokers in Madisonville?
Most reputable pawnbrokers will purchase liability insurance before conducting business. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. Agents can access a list of brokers online here.
How Can Insurance Agents Prospect for Madisonville Pawnbroker Customers?
Madisonville unfortunately does not provide a public database of active pawnbrokers in the city. However, we suggest contacting the City of Madisonville for a list of licensed pawnbrokers within that city. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.