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Defective Title Bond

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A defective title bond, also known as a certificate of title bond or lost title bond, is required by the state and the Department of Motor Vehicles for individuals who attempt to register a vehicle that has a lost or defective title.

Key Highlights

  • A defective title bond is needed when a person purchases a vehicle from a seller with a bill of sale but fails to receive a properly endorsed vehicle title.  
  • It also guarantees damages up to the bond limit for the legitimate titleholder if they make a valid claim on the vehicle. 

How do I purchase a defective title bond?

NFP, the nation's largest and most reliable surety company, is authorized to issue defective title bonds in each of the 50 states. We can provide the best rates for your bond, as well as the fastest issuance, to get your business off and running.

Our short online application makes it easy. Click below to start the application process today.

Defective Title Bond FAQs

A defective title bond covers financial losses for a legitimate titleholder if someone else registers a vehicle with a lost, stolen or improperly transferred title. If the rightful owner later makes a valid claim, the bond provides compensation up to the bond limit.

This bond is typically needed by individuals who are attempting to register or sell a vehicle but lack a valid title. Common situations include when the original title was lost, stolen, destroyed, not transferred properly, contains errors or if the vehicle is old enough to lack a formal title. 

To obtain a defective title bond, you must meet certain conditions that can vary by state, which often include: 

  • A need to register a vehicle without a valid title, such as when the title was lost or not properly transferred. 
  • A bond amount set by the DMV based on the vehicle’s fair market value. 
  • An application submitted through an authorized surety company. 
  • A guarantee that protects legitimate titleholders by covering valid claims up to the bond limit. 

The cost depends on state requirements and the vehicle’s value. When considering the cost of a defective title bond, key factors include: 

  • Bond amounts are usually set at 1.5x to 2x the vehicle’s fair market value. 
  • Premiums typically range from 1.5% to 3% of the bond amount. 
  • Your credit score can influence the premium you pay. 

Without a defective title bond, you cannot legally operate a vehicle if the title is missing or flawed. Most DMVs require this bond to issue a new title, and skipping it can lead to fines, impoundment and legal trouble. 

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