How can I lower my bond premium?

[Anthony]

My surety bond came up for my used car dealership recently. The premium just about doubled this year! A couple years back I was paying a fraction of what it costs me now. What can I do to have the bonding company lower the annual premium? It makes me wonder if I am maybe getting ripped off by my insurance agent.

[Surety Guy]

The surety bond industry has changed dramatically from what it was 2-3 years ago. Currently the sureties are using more conservative underwriting guidelines. In other words, due to the current hard market, more principals have had premium increases than not.

I can not comment on whether your current agent is "ripping you off", as premium rates can vary greatly and each applicant is unique. However, please see below on what the surety will usually use to base your rate.

1. Keep your credit score above 670 (w/ no major flaws)
2. Try to build equity in your home
3. Show a profit on your business financials from year to year (Typically, they are only required for bonds $50,000 and over.)

Let me know if you have any further questions, otherwise start working on lowering your premium for next year. Might as well get started now, I think this hard market is here to stay a bit.

[Unregistered]

My surety bond came up for my used car dealership recently. The premium just about doubled this year! A couple years back I was paying a fraction of what it costs me now. What can I do to have the bonding company lower the annual premium? It makes me wonder if I am maybe getting ripped off by my insurance agent.

Just out of curiosity .. what is your bond amount and what premium are you paying. Also, what state are you in?

[Surety Guy]

Just out of curiosity .. what is your bond amount and what premium are you paying. Also, what state are you in?

Discussion of surety rates are prohibited. We do not want this forum to turn into a large advertisement for agents throughout the country.

However, if you are curious about what rates should be for this particular class of business...

Standard market: 1-3% of the amount of the bond, depending on state requiring the bond. (please see my post above for what is required to be in a standard market.)

Bad credit market: I have seen premiums as high as 15% of the amount of the bond, so stay in the stanard market if possible!

Hope that helped...

[Unregistered]

You didn't answer the guys question ... his rate doubled in a year and was wondering if he was getting ripped off. Without knowing what he was paying, you can't answer the question.

Rates have gone up, but double??

I understand your not wanting this to turn into an advertising board for all kiinds of agents, but at least try to give an honest answer to the guy.

[Admin]

You didn't answer the guys question ... his rate doubled in a year and was wondering if he was getting ripped off. Without knowing what he was paying, you can't answer the question.

I can not comment on whether your current agent is "ripping you off", as premium rates can vary greatly and each applicant is unique.

Read other users posts more carefully before being so critical.

Rates have gone up, but double??

I understand your not wanting this to turn into an advertising board for all kiinds of agents, but at least try to give an honest answer to the guy.

I am upset that you thought that Surety Guy didn't try to give an honest answer. I thought it was an excellent answer. Not only did he let you know that most clients are seeing premium increases, but he told you what you can do to keep them down.

In general, I find that double the premium of a couple of years ago is something that more clients see then not. In fact, clients with some of the missing underwriting factors Surety Guy listed above will see premium rates 15 times higher what they did just a few years back.

For the future, if you feel something wasn't explained well, please ask further questions rather than being so critical. We want to keep this an educational board where all can feel free to post without being badgered and called dishonest.