Arizona Lost Title Bond: A Comprehensive Guide

September 20, 2021

This guide provides information for insurance agents to help their customers obtain an Arizona 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 one and a half times the vehicle’s value as determined by the Motor Vehicle Division
• Who Needs it: Vehicle title applicants in Arizona 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 Arizona: The Arizona Motor Vehicle Division (MVD)

Background

Arizona statute 28-2057 requires residents who never received or have lost their vehicle title to purchase a surety bond prior to obtaining their duplicate title. The Arizona 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 must remain in effect until three years after the vehicle is no longer registered in Arizona. The bond amount must be equal to one and a half times the vehicle’s value as determined by the Motor Vehicle Division.

What is the Purpose of the Arizona Lost Title Bond?

Arizona requires residents to purchase a surety bond as part of the application process to obtain a duplicate 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 Arizona Lost Title Bond?

BondExchange makes obtaining an Arizona 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?

Arizona statute 28-2057 dictates that the limit on the lost title bond must be equal to one and a half times the vehicle’s value. The Motor Vehicle Division will inspect the vehicle to determine its value.

Is a Credit Check Required for the Arizona 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 have an understanding as to how the applicant came to have ownership of the vehicle.

How Much Does the Arizona Lost Title Bond Cost?

The Arizona 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 Arizona Motor Vehicle Division will require a title applicant to purchase a surety bond if they cannot determine with certainty that the title applicant actually owns the vehicle. Typically, title applicants will need to obtain a surety bond in the following situations:

• 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 Arizona Residents Apply for a Bonded Title?

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

Step 1 – Have the Vehicle Inspected

Bonded title applicants must have their vehicle inspected by a certified inspector at an MVD field office, law enforcement agency, or authorized third party.

Step 2 – Complete the Application Affidavit

After their vehicle has been inspected, bonded title applicants must complete an affidavit certifying that they do in fact own the vehicle and stating why they are applying for a bonded title.

Step 3 – Notify All Owner and Lienholders

After the title applicant has completed their affidavit, the Motor Vehicle Division will run a records check to see there are any liens on the vehicle or if it is currently registered to another owner. If there are any liens or other owners, the title applicant must obtain documentation from the lienholder/owner authorizing the applicant to obtain a duplicate title.

Step 4 – Purchase a Surety Bond

Once the Motor Vehicle Division is satisfied that the title applicant does, in fact, own the vehicle, the applicant must purchase and maintain a surety bond

How Do Arizona Bonded Title Applicants File Their Bond?

In Arizona, bonded title applicants should submit the completed bond form, including the power of attorney, to any Motor Vehicle Division office. The Arizona Lost Title Surety Bond requires signatures from both the surety company that issues the bond and the title applicant. The surety company should include the following information on the bond form:

• The legal name of entity/individual(s) buying the bond
• Surety company’s name
• Bond amount
• Vehicle information
• Date the bond is signed

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

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

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $15,000 property damage

Bonded title applicants must purchase and maintain a surety bond equal to one and a half times the value of the motor vehicle.

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

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

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

Arizona 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.