Ohio Probate Bond Requirements
by Phil E Pavarini Jr
When considering requirements to obtain Ohio probate court bonds, it’s important to understand the Court’s requirements to file a case are often very different than the insurance carrier’s requirements to obtain bond. We get daily calls from frustrated consumers attempting to obtain a probate bond. Let’s clarify some of the confusion…
Court requirements could be regulated by each jurisdiction’s local court rules, statutes, regulations, administrative code, or other governmental policy. Such requirements could vary widely, not only by jurisdiction, but also by Judge or Magistrate.
Insurance carriers issue Probate Court Bonds. In a nutshell, a probate bond could be thought of as the insurance carrier ‘co-signing’ with applicant for full penalty amount of the bond. Bonds are different than insurance in that carrier does not expect a loss, they’re only guaranteeing to pay on your behalf, not accept the loss. If a loss occurs, insurance carrier will pay and recoup all losses, plus expenses and costs, from the principal, or applicant for bond.
Well intentioned court personnel often advise petitioners, “It’s no problem, just call any insurance agent they issue them all the time.” That’s when consumers get frustrated with insurance agents, when we have to break the news someone is not bondable.
A decision to co-sign for another person is not to be taken lightly. It’s a big financial risk for the co-signer, something many family members would be reluctant to offer. Personal credit history of the applicant, the person insurance company will be ‘co-signing’ for by issuing bond, is critical. A probate bond is essentially insurance carrier guaranteeing that applicant is responsible with money. The insurance carrier doesn’t know applicant, they can only go by what the data demonstrates… and personal credit history is one of the few indicators available.
NOT APPROVED! Now what?
Options are available.
An often costly solution is to find a surplus lines, non-standard or ‘high risk’ insurance carriers sometimes accept marginal risks. Rates are much higher, a typical probate bond cost is MUCH LESS THAN 1%, non-standard carriers could be as much as 15%!!! They will also often require a ‘Letter of Credit’ from an acceptable financial institution.
Alternate applicant… a friend or family member with very good credit… or sometimes law firms could apply in the firm name (they probably charge extra for the service). This is almost ALWAYS about 1/10th the price. In fact, it’s rarely in applicants best interest to pay for a high risk bond rather than find a DIFFERENT APPLICANT.
We’re always happy to answer any probate bond questions!