What is an Independent Adjuster Bond?
Those operating as an independent adjuster may be required to hold a license, depending on the state where they work. Part of the licensing process involves securing an independent adjuster bond – a form of security to safeguard the general public and the state licensing authority from bad business practices.
An independent adjuster bond is provided by a surety to the principal, the independent adjuster in need of the bond. The state licensing authority requiring the bond is known as the obligee. This structure works in the same manner as other surety bonds for other professionals. Should a claim be made against the independent adjuster bond, financial damages incurred are paid by the bond provider. However, the independent adjuster repays the claim amount in full.
What Does an Independent Adjuster Bond Cost?
Independent adjusters do not have to pay the entire amount of the bond required but instead, are charged a percentage of that amount between 1 and 5%. For example, a $10,000 independent adjuster bond with a 2% price costs you $200.
Because an independent adjuster bond acts as a form of credit extended to the licensed adjuster, the price of the bond varies from one person to the next based on their credit history. If you have had trouble managing your financial responsibilities in the past and have less than perfect credit, the surety agency providing your bond views you as a higher risk. To offset that risk, the percentage rate you pay for the price of an independent adjuster bond is higher.
How Do I Get an Independent Adjuster Bond?
If you are in the process of obtaining your license as an independent adjuster, you’ll also need to begin a bond application if required by your state. The process is straightforward, starting with a free quote for an independent adjuster bond which you can request online.