Warren Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $1,500
- Who Needs it: All pawnbrokers operating in Warren, Michigan
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbroker in Warren: The Warren City Clerk’s Office
Background
Warren Code of Ordinance 30-52 requires all pawnbrokers operating in the city to obtain a license from the City Clerk’s Office. The Warren 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 two $1,500 surety bonds for a total of $3,000 in bond coverage to be eligible for licensure.
What is the Purpose of the Warren Pawnbroker Bond?
Warren requires pawnbrokers to purchase two surety bonds as part of the application process to obtain a pawnbroker license. The bonds protect the public from financial harm if the pawnbroker fails to comply with the regulations set forth in Warren Code of Ordinance 30-54. Specifically, the bonds protect the public if the pawnbroker engages in any acts of fraud or breaches consumer contracts. In short, the bonds are a type of insurance that protects the public if the pawnbroker violates the terms of their license.
How Can an Insurance Agent Obtain a Warren Pawnbroker Surety Bond?
BondExchange makes obtaining a Warren 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 Warren Pawnbroker Bond?
No, a credit check is not required for the Warren 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 Warren Pawnbroker Bond Cost?
The Warren Pawnbroker bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
Warren requires pawnbrokers to purchase two surety bonds as a prerequisite to obtaining a pawnbroker license. To paraphrase Warren Code of Ordinance 30-1, 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. Internet drop-off stores are exempt from the bonding requirement.
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 Warren?
Pawnbrokers in Warren must navigate several steps to obtain a license. Below are the general guidelines, but applicants should contact the City Clerk’s Office for details on the process.
License Period – All Warren Pawnbroker Licenses expire on March 31st of each year and must be renewed before the expiration date.
Step 1 – Purchase Two Surety Bonds
Pawnbrokers must purchase two surety bonds, each in the sum of $1,500, with at least two different sureties for a total of $3,000 in bond coverage.
Step 2 – Complete the Application
Pawnbrokers are required to submit their completed application, including a $260 licensing fee, to the following address:
Office of the City Clerk
One City Square, Suite 205
Warren, Michigan 48093
Pawnbrokers must complete the application in its entirety, and submit the following items:
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- Two $1,500 surety bonds from two different sureties
- Copy of Michigan State Sales Tax License
- Copy of a valid driver’s license or state ID
Pawnbrokers who plan to buy precious metals and gems from the public are required to also obtain a Precious Metal & Gem Dealer License. Likewise, pawnbrokers who intend to sell secondhand hams must also obtain a Secondhand Goods Dealer License.
How do Warren Pawnbrokers Renew Their License?
Pawnbrokers should submit their completed renewal applications to the City Clerk at the following address:
One City Square, Suite 205
Warren, Michigan 48093
Pawnbrokers must pay a $260 renewal fee and all late renewals will be subject to a 10% late fee. All Warren Pawnbroker Licenses expire on March 31st of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Warren Pawnbrokers?
Warren does not require pawnbrokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Pawnbrokers must purchase and maintain two surety bonds, each in the sum of $1,500, with at least two different sureties for a total of $3,000 in bond coverage.
How Do Warren Pawnbrokers File Their Bonds?
Pawnbrokers should mail or deliver their completed bond forms, including the power of attorney, to the following address:
Office of the City Clerk
One City Square, Suite 205
Warren, Michigan 48093
The bond requires signatures from both the surety company that issues the bond and the applicant. 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
- Date the bond is signed
What Can Warren Pawnbrokers do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, pawnbrokers in Warren must ensure that they:
- Do not engage in any acts of fraud
- Do not breach contracts made with consumers
What Other Insurance Products Can Agents Offer Pawnbrokers in Warren?
Warren does not require pawnbrokers to purchase liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will purchase this insurance anyway. 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. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Warren Pawnbroker Customers?
Warren unfortunately does not provide a public database of active pawnbrokers in the city. We suggest contacting the City Clerk’s Office to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.