Have a question? 
+1 815-826-6324 (815-8-BondAI) 
phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
California will not issue a motor club certificate of authority until $100,000 of security is on deposit with the Insurance Commissioner. A surety bond on the state's Motor Club Bond form meets that requirement without parking $100,000 in approved securities, and it carries forward through each renewal period until a surety cancels it.
California Insurance Code 12162 requires a motor club applicant to deposit $100,000 in approved securities or file a $100,000 surety bond on a form prescribed by the Attorney General, executed by an admitted surety insurer. The bond runs to the People of the State of California, protects accepted members and the state, and must be maintained continuously under section 12163.
We can help with all California bonds!
Applicants tend to focus on the $100,000 bond and overlook the net worth rule. The Department of Insurance requires a minimum net worth of $250,000 under Insurance Code 12162.5. A newly formed domestic corporation needs an additional $75,000, for a total of $325,000, so it can stay above the $250,000 minimum during startup.
Under Insurance Code 12160, no one may offer or provide motor club services in California without a certificate of authority. Section 12162(b) requires the club to first deposit security with the commissioner in one of two forms: securities of the kinds approved for stock insurer capital investments, worth $100,000 at par or market value, whichever is less, or a surety bond on a form prescribed by the Attorney General, executed by an admitted surety insurer, in the penal sum of $100,000.
Section 12163 requires that security to be maintained continuously, and failing to do so is grounds for revoking the certificate of authority. The security guarantees that the club will faithfully furnish the motor club services it sold, conform to the laws governing motor club services, and promptly pay its fees, fines, penalties and taxes. A person defrauded or injured by the club's wrongful acts, misrepresentation or failure to provide services may sue on the bond in their own name, and the commissioner may also bring suit on it.
The current Motor Club Bond is Form 50.8 (Rev 8/2023). It names the People of the State of California as obligee and cites Insurance Code sections 12162 and 12163. The bond applies to the license period expiring no later than July 1 of the stated year and to each renewal period after that unless cancelled. A surety cancels by filing notice with the Insurance Commissioner and serving the principal, and the bond ends 30 days after filing or when a replacement bond is accepted, whichever comes first.
The CDI application page states that accidental death and dismemberment benefits, legal defense reimbursement benefits and bail bond benefits must be provided to motor club members directly by an insurer.
Section 12162(c) sets an annual license fee of $424. The certificate of authority filing fee is listed on the Department's schedule of fees and charges. Applications go to the Department electronically through OASIS or by email to CAB-SF-Intake@insurance.ca.gov.
Yes. Insurance Code 12162(b) accepts $100,000 in securities of the kinds prescribed for stock insurer capital investments and approved by the commissioner, valued at par or market, whichever is less. The surety bond is the other option.
No. The Department of Insurance also requires a minimum net worth of $250,000 under Insurance Code 12162.5, and $325,000 for a newly formed domestic corporation.
The bond form applies to the license period expiring no later than July 1 of the stated year and continues through each later renewal period unless the surety cancels. The $424 annual license fee is paid separately.
Under Insurance Code 12163(c), any person defrauded or injured by the club's wrongful act, misrepresentation or failure to provide the services it sold can sue on the bond in their own name. The commissioner can also sue on it.
No. The Department's motor club application page says accidental death and dismemberment, legal defense reimbursement and bail bond benefits must be provided to members directly by an insurer.
This website is a referral and marketing platform that connects users with licensed insurance agents. We do not issue surety bonds directly except in states where we are licensed. All bond applications are processed and fulfilled by licensed agents. By using this site, you agree to our Terms & Conditions, Privacy Policy, and the use of cookies. If you do not agree, please exit the site.
