Montana Lost Title Bond: A Comprehensive Guide

September 23, 2021

This guide provides information for insurance agents to help their customers obtain a Montana Lost Title Bond

At a Glance:

• Average Cost: Minimum of $100 or 1.5% of the bond amount, whichever is greater
• Bond Amount: Equal to the vehicle’s value (more on this later)
• Who Needs it: Vehicle title applicants in Montana 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 Montana: The Montana Department of Justice

Background

Montana statute 61-3-208 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 Montana 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 the vehicle’s value.

What is the Purpose of the Montana Lost Title Bond?

Montana 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 Montana Lost Title Bond?

BondExchange makes obtaining a Montana 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?

Montana statute 61-3-208 dictates that the bond amount must be equal to the vehicle’s value. To determine the vehicle’s value, title applicants must use the National Automobile Dealers Association’s (NADA) appraisal guide. The appraisal must be conducted as of January 1 for the year the title application is submitted. If the vehicle’s value cannot be calculated through NADA, title applicants can complete a Statement of Fact form to determine the bond amount.

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

The Montana 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 Montana Department of Justice requires title applicants to purchase a surety bond if the applicant cannot present the department with tangible proof that they own the vehicle and if the department does not have an ownership record of 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

Vehicle’s worth $500 or less are exempt from all bonding requirements.

How do Montana Residents Apply for a Bonded Title?

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

Step 1 – Consult the Department of Justice

Bonded title applicants in Montana should consult the Department of Justice prior to purchasing a surety bond. Montana does not require all title applicants to obtain a bonded title, and usually only does so as an absolute last resort. Title applicants should ensure that they actually need a bond before purchasing one.

Step 2 – Purchase a Surety Bond

After receiving confirmation from the DOJ, bonded title applicants must purchase and maintain a surety bond in an amount equal to the vehicle’s value.

Step 3 – Have the Vehicle Inspected

Bonded title applicants must have their vehicle inspected by a Montana law enforcement officer. The officer must fill out this form for the applicant to be eligible for a bonded title.

Step 4 – Complete the Application

If the bonded title applicant is applying for license plates they should submit their application to the vehicle services bureau. If no license plates are being applied for, the application should be submitted to the applicant’s county treasurer’s office. The following items must be submitted with the application:

• • Proof of ownership:
    • Notarized bill of sale
    • Canceled check
    • Purchase invoice
  • Vehicle Identification Number Inspection certificate

How Do Montana Bonded Title Applicants File Their Bond?

In Montana, bonded title applicants should submit the completed bond form, including the power of attorney, to the vehicle services bureau, but only if they are also applying for license plates. If no license plates are being applied for, the bond should be submitted to the applicant’s county treasurer’s office. The Montana 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 entity/individual(s) buying the bond
• Surety company’s name
• Bond amount
• Vehicle information
• Date the bond goes into effect

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

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

• $25,000 per person
• $50,000 per accident
• $20,000 property damage per accident

Bonded title applicants must purchase and maintain a surety bond in an amount equal to the vehicle’s value.

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

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

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

Montana 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.