Tennessee Lost Title Bond: A Comprehensive Guide

September 27, 2021

This guide provides information for insurance agents to help their customers obtain a Tennessee 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 Tennessee 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 Tennessee: The Tennessee Department of Revenue

Background

Tennessee statute 55-3-103 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 Tennessee 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 Tennessee Lost Title Bond?

Tennessee 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 Tennessee Lost Title Bond?

BondExchange makes obtaining a Tennessee 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?

Tennessee statute 55-3-103 dictates that the bond amount must be equal to one and a half times the vehicle’s vehicle. To determine the vehicle’s value, title applicants can either have it appraised by a licensed auto dealer or a recognized appraisal website such as the Kelly Blue Book or National Automobile Dealers Association (NADA).

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

The Tennessee 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 Tennessee Department of Revenue 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

Vehicles with a fair market value of $3,000 or less do not require a bonded title.

How do Tennessee Residents Apply for a Bonded Title?

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

Step 1 – Contact the County Clerk

Bonded title applicants in Tennessee should contact their local county clerk’s office prior to purchasing a surety bond. Tennessee 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

Once the county clerk’s office 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 Bonded Title Application

All Tennessee bonded title applications should be emailed to christopher.fischer@tn.gov or mailed to the following address:

Tennessee Department of Revenue
Special Investigations (ATTN: Surety Bonds)
Andrew Jackson Building, 11th Floor
500 Deaderick Street, Suite 11.125
Nashville, Tennessee 37242

Bonded title applicants must complete the application in its entirety, and submit the following documents:

• • A bill of sale from the last registered owner stating why the vehicle was not titled
    • If a bill of sale is not available, the applicant may submit an appraisal (vehicles) or a recent property tax bill (mobile homes)

Step 4 – Complete the Title Application

After the applicant has submitted their bonded title application, the DOR will send the applicant an approval letter and a title application that must be filed with the applicant’s local county clerk’s office.

How Do Tennessee Bonded Title Applicants File Their Bond?

In Tennessee, bonded title applicants should submit the completed bond form, including the power of attorney, to their local county clerk’s office. The Tennessee 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 and address
• Bond amount
• Vehicle information
• Date the bond is signed

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

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

• $25,000 per person
• $50,000 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 Tennessee Residents Avoid Claims Against Their Lost Title Bond?

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

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

Tennessee 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.