You renew your bond and the required amount is higher than last year. What happened? You did not do anything wrong. Bond amounts can change, and it usually comes down to who sets them and how.

You do not set the amount

Here is the key point. You do not pick your bond amount, and neither does the bond company. The obligee sets it. That is the state, the court, or the agency that requires the bond. They decide how much protection they want.

What makes an amount rise

Several things can push the required amount up. For tax and fuel bonds, the amount is often tied to your volume, so a bigger year means a bigger bond. For mortgage bonds, more loan volume can raise it. For court bonds, a larger estate or judgment raises it. For some license bonds, the state simply updates its rules.

The amount is not your price

Remember that the bond amount is the most a claim could pay. It is not what you pay. You pay a premium, usually a small percent of that amount. So if your bond amount doubles, your cost does not double dollar for dollar, and good credit keeps the rate low.

What to do

When your amount changes, just confirm the new number with us. We will re-quote at the best rate we can find. If a higher amount strains your budget, tell us. Sometimes there are options, and we would rather find them with you than surprise you.

A changing bond amount is normal, especially as your business grows. It often means you are doing more work, which is a good problem to have.

Related guide: See how bond costs work.