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How To Become A Bail Agent

There are some 14,000-bail agents currently working in the United States. Of those, there are some agents in high population cities that make hundreds of thousands of dollars a year and there are other agents in those same large towns that won’t make ten thousand dollars a year.  The average bail agent across the country probably makes between twenty-five and fifty thousand dollars a year The bail profession is probably more about whom you know (or rather who knows you) than what you know.  To be successful, you must be known by a very large number and extremely diverse group of the local population.

Getting Started:

Before you worry about getting a license, take some time and evaluate your market.  Talk to the Sheriff of your county and see what he requires to approve bail agents.  Talk to the Police officers and Sheriff’s deputies you know and see what they think of the idea of your writing bail.  If you don’t know the Sheriff and a lot of the police in your area, this may not be a good business for you.  While it’s certainly not required, knowing the local law enforcement certainly helps being a bail agent.  How many criminal defense attorneys do you know?  Do you know the prosecuting attorneys in your area and how well do you know the Judges?   These are the key audiences of the bail agent and without them you’ll be starting with a severe deficit.

Other questions you need answered are how much competition is there in your area.  Are you in a high population center with scores of companies already there?  Are you in a small county with only one company?  Sometimes that one company will be harder to compete against than the high population center.  If they’ve been there a long time and have a long established record of fair dealings in the community and are well respected by the law enforcement and judicial community, it will be very hard to compete with them. 

 The other question you need to answer is how many people go to jail and of those how many actually post bail as opposed to being released on their own recognizance or some other court release program.  There are four states that do not have commercial bail; they are Illinois, Kentucky, Oregon and Wisconsin.  And there are other places where they have very little commercial bail, such as Maine and Nebraska.

How to become licensed:

 In most states, bail agents are licensed by the Department of Insurance.  There may not be a license specific for bail agents; in many states, the license required is for property & casualty insurance.  Contact the licensing division of the insurance department of your state and they can tell you which license you need.  If they don’t have a specific bail agent’s license and they seem confused about what you need, tell them you need a license to post surety bonds.

 Ask them what the education requirements are for the license and where you can get the education.  Ask them if there is a separate test required and where to take the test.  Then ask them to send you all the forms you need to apply for such a license and how much money you will need to send in with the application.  Ask them are you needed to submit fingerprints; pictures or anything else required they haven’t told you about.

 A Bail Bond Board regulates the state of Arkansas and you will need to contact them, rather than the department of insurance.  In a few states, if you have enough money, you don’t need an insurance company and you can put the money up with the court.  You will need to contact your courts if you feel you would qualify.

LINK TO LIST OF STATE INSURANCE DEPARTMENTS

Why do I need an insurance company?

Unless you are independently wealthy and live in one of the states that allow personal surety, sometimes called pocket bondsmen or property bail agents, you must be appointed by an insurance company to write bail bonds. 

 What does an insurance company do for me?

When you consider what a bail agent does, where does the insurance company fit in?  If the bail agents’ job is to return the defendant to court, how does an out of state insurance company help?  If you’re not wealthy enough to write on your own assets, then you need the assets of an insurance company to guarantee your bonds. 

When an insurance agent sells an auto policy, the agent gets a small commission and if the auto is damaged, it’s not the agent’s problem. The company steps in and settles with the policyholder.  When a bail agent writes a bail bond, the agent gets the money and pays the company a premium. And when the defendant doesn’t appear, the agent recovers the defendant and if they can’t recover the defendant, the agent pays the bond.  The purpose of the insurance company is to step in if the agent fails. It’s more reinsurance than insurance.  The bail insurance company covers the agents’ family if something happens to the agent by cleaning up the outstanding liability accrued by the agent.

 What determines how much I have to pay the insurer?

 The premium rates an agent pays a company is determined by the financial status of the agent.  The financial stability, credit ratings, community ties, experience level and other factors determine the agent’s rate.  The other determining factor is the amount of money placed into a collateral account or build-up-fund (BUF) by the agent.  What is a BUF?  It is money that belongs to the agent, held by the company in trust, which guarantees the company that the agent will fulfill the obligations of their contract. What happens to the BUF?  The BUF is the agent’s money – the company must be accountable for it – and if the agent takes care of their business, it turns into quite a retirement account.  If the agent fails, then the BUF is used to pay judgments, recovery fees and legal fees.  A word of caution here – if you become an agent, make sure your BUF is held in an FDIC insured account and that you receive monthly statements showing what’s there.  Too many people have lost money to dishonest general agents and a couple of companies that went bad over the years.  It is the best policy that the insurance company holds your BUF. At any rate make sure that you receive a copy of the bank statement each month.

What else should I do?

 When you decide on the insurance company you want to represent, you may have to deal with their general agent.  Many companies use general agents (GA’s) as a buffer between the company and the agent for liability purposes. They also use general agents because of the expense they would incur if they had to hire all of the personnel necessary to train and supervise agents.  Some companies have one national general agent while other companies use large regional general agents.

 Once you’ve found the company and general agent you want to work with, you need to take your time and make sure of what you’re getting into.  Have them explain the contract to you in detail and then take the contract to your attorney and see if the attorney’s interpretation is the same.  If it’s not, ask yourself the question, WHY?  In any contract, you assume specific obligations and you need to fully understand what you’re doing – so take your time.

 One last thing – ask for a referral list of the general agents/companies agents and call them up and find out how well they like the GA/company.  Ask those agents if they know anyone who ever had a problem with the GA or the company.  Get their phone number and call them up and find out what the problem was – it may be sour grapes and there again – you won’t know if you don’t ask!

 

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