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12680 West Lake Houston Pkwy
Suite 510
Houston, TX 77044
TX DPS C20189
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Violation Retrieval - Commonly Asked Questions

 

Surety Agent or Professional Bail Bondsman: What’s the Difference?

The difference between a property bond and a surety bond is simply who is ultimately liable for paying the bond off in the event of a final judgment of forfeiture. A surety bond is backed by a surety (or insurance) agency that the bondsman is qualified to write bonds on behalf and the bond works more or less like an insurance policy. A property bond is collateralized by the bail bondsman's own funds or property on deed with the jurisdiction that allows him or her to post bonds for its defendants. Property bondsmen are also often referred to as "Professional Bondsmen" while those writing on surety are often referred to as Surety Agents.


Regardless of what type of bond is written, if a $10,000 bond goes into forfeiture then someone is going to be liable for the entire $10,000.


If a surety bond is forfeited, then the bondsman has a special fund (referred to as a BUF or Build Up Fund) to which he must deposit a small portion of every defendant's premium payment that he can draw from in the event that he or she has to pay a forfeiture; if it is not enough and he or she cannot pay the money from his or her own funds, then the surety company will ultimately pay the difference of the forfeiture judgment and what is in the BUF, no longer allow the bondsman the ability to write bonds with their backing (referred to as a "power" i.e., if a bondsman has a $100,000 power authorized by Banker's Insurance on file with the county, then he has the ability to have $100,000 of outstanding bail pieces out at any one time backed by Banker's) and then will probably continue to go after the bondsman for the remaining balance.


If the bond was collateralized by property and it goes into final bond forfeiture, then the bondsman has to come up with the cash to satisfy the entire judgment or the collateral is seized and liquidated. If anything is due afterward, then the bondsman is still on the hook. If the liquidation yields more cash than the bond (and court costs), then the bondsman gets that back.


In most jurisdictions the bondsman can have an outstanding amount of bail at any one time in relation to the value of the collateral; some allow a ratio of 1:1 meaning that if the collateral is worth $100,000 then he can have the same amount posted in outstanding bail. Most, however, provide ratios as high as 10:1 meaning that if the value of the property is valued at the same $100,000 then he can write up to $1,000,000 in outstanding bonds. The amount of bail a property bondsman can have outstanding at any particular time is called "availability" (similar to "power" just in a different context).


As defendant's move through the court system and the bonds are exonerated the power or availability is replenished and the bondsman can write more bonds and collect more premiums (if a surety bond) or writing fees (service fees), in the case of property bonds. It's a constant cycle akin to a pipeline; as soon as material moves through the pipe more can be put in.


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