Maryland Lost Title Bond: A Comprehensive Guide

September 22, 2021

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

Background

Maryland statute 13-109 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 Maryland 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 from the date of issuance and must be in an amount equal to one and a half times the vehicle’s value.

What is the Purpose of the Maryland Lost Title Bond?

Maryland 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 a Maryland Lost Title Bond?

BondExchange makes obtaining a Maryland 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?

Maryland statute 13-109 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 Maryland 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 Maryland Lost Title Bond Cost?

The Massachusetts 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 Maryland 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

How do Maryland Residents Apply for a Bonded Title?

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

Step 1 – Consult the Motor Vehicle Administration

Bonded title applicants in Maryland should consult their local MVA Office prior to purchasing a surety bond. Maryland 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 – Purchase a Surety Bond

After consulting with the MVA, bonded title applicants must purchase and maintain a surety bond in an amount equal to one and a half times the vehicle’s value.

Step 3 – Have the Vehicle Inspected

Maryland requires all title applicants to have their vehicle inspected no more than 90 days prior to submitting their title application. The inspection must be conducted by a licensed Maryland inspection station.

Step 4 – Complete the Application

All Maryland title applications should be delivered to the applicant’s local MVA Office. Title applicants must complete the application in its entirety, and submit the following items:

• • Certificate of inspection
  • Proof of ownership (bill of sale, canceled check, etc)
  • Proof of purchase price
  • Odometer disclosure statement
  • Information regarding any active liens on the vehicle

How Do Maryland Bonded Title Applicants File Their Bond?

In Maryland, bonded title applicants should submit the completed bond form, including the power of attorney, to their local MVA Office. The Maryland Lost Title Surety Bond requires signatures from both the surety company that issues the bond and the bonded title applicant. The surety company should include the following information on the bond form:

• The legal name and address of entity/individual(s) buying the bond
• Surety company’s name and state of incorporation
• Bond amount
• Vehicle information

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

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

• $30,000 per person
• $60,000 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 value.

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

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

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

Maryland 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.