Iowa Lost Title Bond: A Comprehensive Guide

September 21, 2021

This guide provides information for insurance agents to help their customers obtain an Iowa 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 current value
• Who Needs it: Vehicle title applicants in Iowa 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 Iowa: The Iowa Department of Transportation

Background

Iowa statute 321.24 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 Iowa 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 and must be in an amount equal to one and a half times the vehicle’s current value.

What is the Purpose of the Iowa Lost Title Bond?

Iowa 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 an Iowa Lost Title Bond?

BondExchange makes obtaining an Iowa 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.

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.

How is the Bond Amount Determined?

Iowa statute 321.24 dictates that the bond amount must be equal to one and a half times the vehicle’s current value. The Department of Transportation will determine the vehicle’s value during the title application process.

Is a Credit Check Required for the Iowa 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 Iowa Lost Title Bond Cost?

The Georgia 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 Iowa Department of Transportation will require a title applicant to purchase a surety bond if the applicant cannot present the department with adequate proof that the applicant does in fact own 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

Vehicles that have been issued a junking certificate cannot be titled through bonding unless the vehicle is at least 25 years old.

How do Iowa Residents Apply for a Bonded Title?

To apply for a bonded title, Iowa residents must complete the following steps:

Step 1 – Consult the County Treasurer

Bonded title applicants in Iowa should consult with their local county treasurer prior to purchasing a surety bond. Iowa does not require all title applicants to obtain a bonded title, and title applicants should ensure that they actually need a bond before purchasing one.

Step 2 – Complete the Application

Bonded title applicants must complete the title application and submit it via email to vscusto@iowadot.us or mail it to the following address:

Iowa Department of Transportation
Office of Vehicle and Motor Carrier Services
Box 9278
Des Moines, Iowa 50306

Applicants must also submit a copy of any written document received when the vehicle was acquired, such as a bill of sale or canceled check.

Step 3 – Purchase a Surety Bond

After submitting their application, bonded title applicants must purchase and maintain a surety bond in an amount equal to one and a half times the vehicle’s current retail value. The Department of Revenue will determine the vehicle’s value and inform the applicant of their required bond amount after receiving their title application.

Step 4 – Pass Inspection

The Department of Revenue will have an investigator contact the title applicant to ensure that the information provided on the title application is accurate and to verify that the vehicle meets all of the Department’s requirements.

How Do Iowa Bonded Title Applicants File Their Bond?

In Iowa, bonded title applicants should mail the completed bond form, including the power of attorney, to the following address:

Iowa Department of Transportation
Office of Vehicle and Motor Carrier Services
Box 9278
Des Moines, Iowa 50306

The Iowa Lost Title Surety Bond requires signatures from both the surety company that issues the bond and the bonded title applicant. The Department of Transportation will provide the title applicant with a bond form after they have received the title application.

What Are the Insurance Requirements for Bonded Title Applicants in Iowa?

Iowa requires all motor vehicle owners to purchase auto insurance with the following minimum limits:

• $20,000 per person
• $40,000 per accident
• $15,000 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 current retail value.

How Can Iowa Residents Avoid Claims Against Their Lost Title Bond?

To avoid claims against their bond, bonded title applicants in Iowa must ensure that they are the rightful owners of the motor vehicle.

What Other Insurance Products Can Agents Offer Bonded Title Applicants in Iowa?

Iowa 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.