Virginia Title Insurance Settlement Agent Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Virginia Title Insurance Settlement Agent bond (occasionally referred to as a Real Estate Settlement Agent bond).
*This page focuses exclusively on the $200,000 license bond required for real estate settlement agents operating in Virginia. Real estate settlement agents that are registered as a business entity must also obtain a $200,000 Fidelity bond or similar insurance coverage. Contact BondExchange to obtain a Fidelity bond.
At a Glance:
- Lowest Cost: $750 per year or $75 a month
- Bond Amount: $200,000
- Who Needs It: All real estate settlement agents operating in Virginia
- Purpose: To protect the public from financial harm if the real estate settlement agent commits fraud or engages in unfair business practices
- Who Regulates Real Estate Settlement Agents in Virginia: The Virginia Commissioner of Insurance
Background
Code of Virginia 55.1-1003 requires all real estate settlement agents operating in the state to obtain an approved registration from the Commissioner of Insurance. The Virginia Legislature enacted the registration requirement to ensure that real estate settlement agents do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, real estate settlement agents must purchase and maintain a $200,000 surety bond to be eligible for licensure.
What Is the Purpose of the Virginia Title Insurance Settlement Agent Bond?
Virginia requires all real estate settlement agents to purchase a surety bond as part of the application process to obtain an approved registration. The bond ensures that restitution is available to any damaged party should the real estate settlement agent fail to abide by the regulations outlined in the Code of Virginia Chapter 10. Specifically, the bond protects claimants if the real estate settlement agent commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the real estate settlement agent violates the terms of their license.
How Can an Insurance Agent Obtain a Virginia Title Insurance Settlement Agent Bond?
BondExchange makes obtaining a Virginia Title Insurance Settlement Agent bond easy. Simply log in to your account and use our keyword search to find the “real estate settlement agent” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Virginia Title Insurance Settlement Agent Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Virginia Title Insurance Settlement Agent bond. Real estate settlement agents with excellent credit and work experience can expect to receive the best rates. Real estate settlement agents with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Virginia Title Insurance Settlement Agent Bond Cost?
The Virginia Title Insurance Settlement Agent bond can cost between $750 to $12,000 per year or $75 to $1,200 per month. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $200,000 bond requirement.
$200,000 Virginia Title Insurance Settlement Agent Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $750 | $75 |
| 680 – 719 | $900 | $90 |
| 660 – 679 | $1,400 | $140 |
| 649 – 659 | $2,000 | $200 |
| 629 – 648 | $3,000 | $300 |
| 600 – 628 | $5,000 | $500 |
| 580 – 599 | $7,000 | $700 |
| 550 – 579 | $8,000 | $800 |
| 525 – 549 | $10,000 | $1,000 |
| 500 – 524 | $12,000 | $1,200 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Virginia Define “Real Estate Settlement Agent”?
To paraphrase Code of Virginia 55.1-1000, a real estate settlement agent provides escrow, closing, or settlement services to real estate transactions. Exemptions to this surety bond requirements apply to real estate agents themselves.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Real Estate Settlement Agents Become Registered in Virginia?
Real estate settlement agents in Virginia must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Commissioner’s Licensing and Registration webpage for details on the process.
Registration Period – Real estate settlement agents are required to renew their registration with the Virginia Commissioner every two years after their initial registration.
Step 1 – Obtain Title Agent/Agency License
The Virginia Commissioner of Insurance first requires real estate settlement agent applicants to obtain a title insurance agent or agency license.
Step 2 – Fulfill Financial Requirements
All real estate settlement agents must purchase and maintain a surety bond for registration purposes within the State of Virginia. In addition, a $250,000 Errors and Omission insurance policy and a $100,000 Blanket Fidelity bond or Employee Dishonesty insurance policy are required.
Step 3 – Apply for Registration
Registration as a real estate settlement agent must be completed online through the Sircon website. A nonrefundable $15 fee is required.
How Do Real Estate Settlement Agents in Virginia Renew Their Registration?
Real estate settlement agents are required to renew their registration every two years after their initial registration. Renewal applications can only be submitted within 90 days of your renewal due date and must be submitted via Sircon.
What Are the Insurance Requirements for Real Estate Settlement Agents in Virginia?
According to Code of Virginia 55.1-1004, the real estate settlement agents must purchase and maintain a $250,000 Errors and Omission insurance policy.
How Do Real Estate Settlement Agents File Their Bonds in Virginia?
Real estate settlement agents should submit their completed bond forms, including the power of attorney, to the Virginia Commissioner of Insurance (see the mailing address listed below).
Bureau of Insurance
P.O. Box 1157
Richmond, VA 23218
The surety bond requires signatures from the surety company, as well as the real estate settlement agent. The surety company should include the following information on the bond form:
- The legal name of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Virginia Real Estate Settlement Agents Do to Avoid a Claim Against Their Surety Bond?
The easiest way to avoid a claim as a real estate settlement agency is to comply with all applicable license regulations. Common actions that can cause an official bond claim are listed below:
- Negligence
- Default
- Misrepresentation
- Fraud
For example, failure to maintain accurate/current accounting and finance records of all business transactions is subject to a negligence violation. If the violation remains unresolved by the licensee, a bond claim may be filed.
What Other Insurance Products Can Agents Offer Real Estate Settlement Agents in Virginia?
The Virginia Commissioner of Insurance requires real estate settlement agents to purchase coverage for a $250,000 Errors and Omissions policy, which is just another name for professional liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Real Estate Settlement Agent Customers in Virginia?
Unfortunately, Virginia does not provide a public list of active real estate settlement agents in the state. We suggest contacting the Commissioner of Insurance to obtain an active list of registered real estate settlement agents. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
