Why can't I get an exact quote?

[Unregistered]

I am being required to obtain a surety bond. I want to get a quote of how much it is going to cost me. How come I cannot get an exact quote before I have to complete all of the paperwork? I don't want to spend all of that time completing the applications if the premium is going to be too high.

[Admin]

Well for one, this board is strictly for educational purposes, therefore there is no discussion of premium rates. We want to keep this forum helpful to the visitors, not a free advertisement for surety bond agents.

As far as not being able to obtain a quote over the phone...

There are multiple factors in place for an agent to determine what surety you will be written with and what a possible premium may be. Premium rates can range anywhere from less then 1% to as high as 15% with 100% collateral! As you can see there is much variation depending on the following:

• Type of bond
• What the bond is guaranteeing (specifically the bond form)
• Personal credit of owner(s)
• Personal Financial Statement of owner(s)
• Resumes of owner(s) (sometimes)
• Business Financial Statements (for larger bonds, or higher risk bonds)
• And in some cases, other etc. variables (ie type of work being completed for a contract bond)

In other words, there is no way for an agent to get the full picture of your situation on the phone. Sometimes I will give clients a ballpark range, but I always make it a range, as there are too many variables that can change the premium.

I think the most common misconception with surety bonds is that they are easily obtained and that one rate applies for all. Make no mistake, surety bonds are not insurance. The rates vary and not everyone can get approved for all bond types.

Unfortunatly, there are many agents that will give rates to clients over the phone. After applying the principal finds out they are not approved at the preferred rate they were originally quoted. This is a practice that not only frustrates principals, but also honest agents (like myself ) that take the time to explain to the client that a rate can not be given over the phone, only a ballpark figure. Due to these shaddy price quotes, principals often tell me they can obtain the bond for less. I usually hear from them a couple weeks later asking me to reopen their file. I wrote an article on the subject at the following link: Bond Price Article

I hope that helped to explain why you can't obtain a quote prior to applying.