North Carolina Lost Title Bond: A Comprehensive Guide
September 23, 2021
This guide provides information for insurance agents to help their customers obtain a North Carolina Lost Title Bond
At a Glance:
- Average Cost: Minimum of $100 or 1.5% of the bond amount, whichever is greater
- Bond Amount: One and a half times the vehicle’s value
- Who Needs it: Vehicle title applicants in North Carolina 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 North Carolina: The North Carolina Division of Motor Vehicles
North Carolina statute 20-76 requires residents who do not have adequate proof that they own their vehicle to purchase a surety bond prior to obtaining a duplicate title. The North Carolina 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 will be active for three years from the date of issuance and must be in an amount equal to one and a half times the vehicle’s value.
What is the Purpose of the North Carolina Lost Title Bond?
North Carolina requires residents to purchase a surety bond as part of the application process to obtain a bonded 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 North Carolina Lost Title Bond?
BondExchange makes obtaining a North Carolina 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.
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How is the Bond Amount Determined?
North Carolina statute 20-76 dictates that bond amount must be equal to one and a half times the vehicle’s value. To determine the vehicle’s value, title applicants must have the vehicle appraised according to North Carolina’s current Value Schedule. Title applicants can obtain a current Value Schedule by visiting any DMV license plate agency or calling the DMV Customer Contact Center at (919) 715-7000. Mobile homes and vehicle’s not contained within the value schedule must be appraised by two separate auto dealers, and the appraisals must be listed on the dealers’ letterheads.
Is a Credit Check Required for the North Carolina 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 understand how the applicant came to have ownership of the vehicle.
How Much Does the North Carolina Lost Title Bond Cost?
The North Carolina 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 North Carolina Division of Motor Vehicles requires title applicants to purchase a surety bond if the applicant cannot present the department with tangible proof that they own the vehicle and if the department does not have an ownership record of 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 North Carolina Residents Apply for a Bonded Title?
To apply for a bonded title, North Carolina residents must complete the following steps:
Step 1 – Consult the DMV
Bonded title applicants in North Carolina should consult the Division of Motor Vehicles prior to purchasing a surety bond. North Carolina does not require all title applicants to obtain a bonded title, and usually only does so as an absolute last resort. Title applicants should ensure that they actually need a bond before purchasing one.
Step 2 – Purchase a Surety Bond
After receiving confirmation from the DMV, bonded title applicants must purchase and maintain a surety bond in an amount equal to one and a half times the vehicle’s value.
Step 3 – Have the Vehicle Inspected
All title applicants must have their vehicle inspected by the License and Theft Bureau. Applicants must have their title application and application of facts forms completed prior to inspection. Applicants can get their vehicle inspected at any License and Theft Bureau office.
Additionally, bonded title applicants must complete a separate emissions inspection to determine their vehicle is in compliance with all applicable emissions standards. Emissions inspections can be conducted by any authorized inspector.
Step 4 – Submit the Required Documents
Bonded title applicants must submit the following documents to their local DMV office.
How Do North Carolina Bonded Title Applicants File Their Bond?
In North Carolina, bonded title applicants should submit the completed bond form, including the power of attorney, to their local DMV office. The North Carolina 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 entity/individual(s) buying the bond
- Surety company’s name and address
- Bond amount
- Vehicle information
- Date the bond is signed
What Are the Insurance Requirements for Bonded Title Applicants in North Carolina?
North Carolina requires all motor vehicle owners to purchase auto insurance with the following minimum limits:
- $30,000 per person
- $60,000 per accident
- $25,000 property damage per accident
Bonded title applicants must purchase and maintain a surety bond in an amount equal to one and a half times the vehicle’s value.
How Can North Carolina Residents Avoid Claims Against Their Lost Title Bond?
To avoid claims against their bond, bonded title applicants in North Carolina must ensure that they are the rightful owners of the motor vehicle.
What Other Insurance Products Can Agents Offer Bonded Title Applicants in North Carolina?
North Carolina 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.