Filing Claims Against a Surety Bond

Who can file a dealer surety bond claim? And how does one do it?

What Is the Dealer Surety Bond Rule in Texas?

All licensed dealers – including motor vehicles, motorcycles, wholesale only, wholesale motor vehicle auction and independent mobility motor vehicle licensees- in Texas are required to maintain a $25,000 surety bond. The bond is supposed to guarantee that the dealer will pay all valid bank drafts and checks drawn by her/him to purchase vehicles, as well as transfer valid titles for all vehicles that s/he plans to sell. If someone suffers a financial loss as a result of a dealer's failure to do certain things, then the full amount of the bond is available to offset that loss.
Who May File a Dealer Surety Bond Claim?

Any customer, dealer, auction, third party lender, or other entity that does business with a dealer may file a claim against that dealer's surety bond. This includes the State of Texas and counties in which the dealer does business.
How Does One File a Claim?

The first step to filing a claim against a dealer's surety bond is to contact the DMV and find out what company issued the dealer's bond. Then a claim is filed with the company who issued the bond. The company will investigate the claim and, if the company determines that the claim is valid, then the company will reimburse the claimant for any losses up to the bond amount. Keep in mind that once the bond is exhausted, no other valid claims will be reimbursed.


By: Ann Mullen-Martin
On: 01/05/2018 09:56:38
It's important to remember that the Surety Company will come back against the dealer to be reimbursed for any claim payments made. Also, once a claim is validated and paid, it becomes very difficult for a dealer to obtain a dealer bond. Bonds are not insurance, but only promises that the dealer will pay.

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