Surety Bond Encyclopedia

Designated Agent ($50,000) Bond - Statewide in Alabama

Brief Summary

The $50,000 designated agent bond is what lets a bank, pawnshop, towing company, insurer or manufactured home dealer process Alabama title applications itself instead of sending customers to the probate office. It is a flat amount with no tiers, it attaches to the online MyDMV application, and the premium is a fraction of the penal sum. Most applicants are quoted the same day.

Alabama requires a $50,000 surety bond from any non dealer appointed as a designated agent of the Department of Revenue for motor vehicle title work. The authority is Code of Ala. 32-8-34 and the amount is fixed by Ala. Admin. Code 810-5-12-.02. Licensed motor vehicle dealers do not post a second bond because their regulatory license bond already covers the designated agent appointment, and full time bonded Department of Revenue employees are exempt.

We can help with all Alabama bonds!

How to Apply for a Designated Agent ($50,000) Bond:

Confirm you are a non dealer applicant. Licensed dealers use their regulatory license bond instead and do not buy this bond.
Legal business name exactly as it will appear on the MyDMV designated agent application.
Owner or principal name, home address and Social Security number for the surety's credit review.
Complete the bond application and review the quoted annual premium.
Pay the premium and receive the executed $50,000 bond payable to the State of Alabama.
Submit the designated agent application through MyDMV with the bond, then complete the required designated agent training modules.

Detailed Information About the Alabama Designated Agent ($50,000) Bond:

Who posts the $50,000 bond

A designated agent is a business the Alabama Department of Revenue appoints to accept and process certificate of title applications on its behalf. Code of Ala. 32-8-34 creates the appointment and lets the department require a bond from the agents it appoints. Ala. Admin. Code 810-5-12-.02 sets the amount at $50,000 for designated agents, title service providers, dealers, dismantlers, parts recyclers and wholesale auctions alike. There is no tier and no reduced amount for a smaller operation.

The Motor Vehicle Division lists the businesses it will appoint: licensed financial institutions holding a state banking license, pawnshops holding an Alabama pawnshop license, insurance companies, towing companies, manufactured home dealers, vessel dealers, out of state financial institutions for manufactured homes only, and law firms for manufactured homes only where a principal is admitted to the Alabama State Bar. Each of these posts the $50,000 bond payable to the State of Alabama before the department opens its designated agent account.

Who does not post a separate bond

Licensed Alabama motor vehicle dealers are designated agents by statute under 32-8-34(b), and their Act 539 regulatory license bond satisfies the designated agent bonding requirement. A dealer should not buy this bond on top of the dealer bond. Full time bonded employees of the Department of Revenue may also serve as designated agents without an additional bond. County probate judges, license commissioners and revenue directors who issue plates are designated agents by office and are not covered by this page.

How the appointment works

The application is electronic through the MyDMV portal. The legal business name on the application must match the name on the bond form exactly, which is the most common reason a filing is sent back. Once the department receives the application and bond it sets up the designated agent account and grants MyDMV access. Every designated agent must complete the department's designated agent training modules. Training is a condition of the appointment and does not replace the bond.

What the bond guarantees

The bond protects the state and the public against losses from a designated agent that mishandles title applications, fees or records in violation of the Uniform Certificate of Title and Antitheft Act and the department's rules. Under 810-5-12-.02, if the surety sends a cancellation notice and a replacement bond is not on file before the cancellation date, designated agent status is revoked immediately. Keep the bond continuous and renew the premium before the surety's anniversary date.

Confirm the current bond form and any filing step with the Motor Vehicle Division before the surety executes the bond.

Eligibility and Requirements for a Alabama Designated Agent ($50,000) Bond:

A corporate surety authorized to do business in Alabama.
Bond amount of exactly $50,000, flat, under Ala. Admin. Code 810-5-12-.02.
State of Alabama, through the Department of Revenue, named as obligee.
Business name on the bond matching the designated agent application exactly.
Owner credit review. Credit shapes the rate rather than eligibility for most applicants at this size.
Continuous bond. A cancellation without a replacement on file revokes the appointment immediately.

Alabama Designated Agent ($50,000) Bond FAQs:

We are a licensed Alabama car dealer. Do we need this bond?

No. Under Code of Ala. 32-8-34(b) every licensed dealer is a designated agent, and the Motor Vehicle Division states that the dealer regulatory license bond satisfies the designated agent bonding requirement. This $50,000 bond is for non dealers such as banks, pawnshops, insurers, towing companies and manufactured home dealers.

Is the amount ever less than $50,000?

No. Ala. Admin. Code 810-5-12-.02 sets a single $50,000 figure for designated agents and title service providers. There is no tier based on volume or location count.

Who is eligible to be appointed?

Licensed financial institutions, pawnshops with an Alabama pawnshop license, insurance companies, towing companies, manufactured home dealers, vessel dealers, and for manufactured homes only, out of state financial institutions and law firms with a principal admitted to the Alabama State Bar.

Does the training module replace the bond?

No. All designated agents must complete the department's training modules, and the bond is a separate condition. Both are required before the appointment is active.

What happens if the bond cancels?

Under 810-5-12-.02, if the surety cancels and a new bond is not filed before the cancellation date, designated agent status is revoked immediately. Pay the renewal premium early and have the surety continue the bond rather than reissue it.

How is the premium set?

The surety quotes a percentage of the $50,000 penal sum based on the owner's personal credit and the business's financial condition. Established, well capitalized applicants receive the lowest rates. Premium is paid annually for as long as the appointment is held.