New York Lost Title Bond: A Comprehensive Guide

September 27, 2021

This guide provides information for insurance agents to help their customers obtain a New York 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 New York 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 New York: The New York Department of Motor Vehicles

Background

New York statute 2105 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 New York 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 New York Lost Title Bond?

New York 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 New York Lost Title Bond?

BondExchange makes obtaining a New York 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?

New York statute 2105 dictates that the limit on the lost title bond must be equal to one and a half times the vehicle’s value. The Department of Motor Vehicles will determine the vehicle’s value during the title application process.

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

The New York 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 New York Department of Motor Vehicles requires title applicants to purchase a surety bond if the applicant cannot present the department with tangible proof that they own the vehicle and are unable to contact the vehicle’s previous owner. Lost title bonds are typically 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 New York Residents Apply for a Bonded Title?

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

Step 1 – Contact the DMV

Bonded title applicants in New York should consult their local DMV office prior to purchasing a surety bond. New York 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. If the DMV determines the applicant needs a bond, they will assist the applicant in determining the vehicle’s value.

Step 2 – Purchase a Surety Bond

Once the DMV determines the applicant needs a bonded title, the applicant must purchase and maintain a surety bond in an amount equal to one and a half times the vehicle’s value.

Step 3 – Complete the Application

Bonded title applicants can submit their completed title applications to their local DMV office. The application must be completed in its entirety, and be accompanied by the following documents:

• • Proof of ownership (bill of sale, canceled check, manufacturer’s statement of origin, etc)
  • Proof of the applicant’s name and date of birth
  • Sales tax clearance
  • List of all liens against the vehicle

Bonded title applicants must pay a $50 fee when submitting their title application.

How Do New York Bonded Title Applicants File Their Bond?

In New York, bonded title applicants should mail the completed bond form, including the power of attorney, to their local DMV office. The New York 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, city, and state entity/individual(s) buying the bond
• Surety company’s name, city, and state of incorporation
• Bond amount
• Vehicle information
• Date the bond is signed
• Witness signatures for both the principal and surety company

What Are the Insurance Requirements for Bonded Title Applicants in New York?

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

• $10,000 per person
• $25,000 per accident
• $50,000 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 New York Residents Avoid Claims Against Their Lost Title Bond?

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

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

New York 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.