Surety Bond News

Virginia legislators have enacted a new bill concerning the liability of surety companies when it comes to auto dealer bonds and attorney fees. The law is labeled HB 171 and changes the existing law and states that the surety on a bond is responsible for any claims and attorney fees accumulated on a bond. The inclusion of attorney fee’s can be a very unfair practice and the attorney fee abuse in Florida is a great example of why.

Auto dealer bonds now protect the broader public in New Hampshire thanks to new legislation. The new law is named SB 156 and adds extra protection to the bond that’s required of retail vehicle dealers, auto wholesale dealers, and utility dealers. Originally the required bond only protected individuals who purchased a vehicle from the dealer and experienced any losses as a result of the dealer’s actions. SB 156 states that the bond now protects a town, city, or the State if it encounters a loss as a result of a dealer failing to collect fees for motor vehicle registration, permit registration, registration transfer, and title applications.

The state of Nevada has enacted a new law relating to automobile wreckers. The new law is titled AB 204 and states that an automobile wrecker can utilize the new law’s streamlined method for processing a motor vehicle for parts/scrap if they acquire a $50,000 surety bond; the bond must be from a state licensed surety company. The bond specified in this bill is in addition to other possible bonds already required of the wrecker. The bond also can cover multiple business locations but only if the wrecker holds ownership of at least 51% in each location.

Anyone dealing with motor vehicle dealers in Virginia is going to be affected by this new legislation. The new law is named HB 1838 and caps the amount that can be reimbursed in a claim against a motor vehicle dealer’s bond; it’s now capped at $20,000. The previous law capped the amount to be recovered at the full amount of the bond, which is $50,000.

Surety bonds help separate legitimate businesses from disreputable ones. When a company cannot or avoids obtaining bonds needed to run a legal business, it’s usually a bad sign. (more…)