You received a surety bond renewal notice from Jet Insurance Company via email, and soon enough in the mailbox. You might be thinking, “Why am I getting hit with a bond renewal invoice? I was told the bond was continuous!”
Let’s dive into what a “continuous until cancelled” bond actually means in the surety industry and what it means to your bond renewal with Jet.
The continuous until cancelled language on the bond form keeps the bond in force until the surety company actively files a cancellation notice with the regulatory agency who required the bond. Regulators prefer this method to cut down on paperwork. You (the principal who purchased the bond) benefit by skipping the hassle of filing a new bond every year.
When a request for cancellation is sent by the surety company, the regulator will end the bond obligation. Typically, there is a cancellation period around 30-60 days where the bond liability remains. Jet Insurance Company will request cancellation if we have not received payment to continue the bond.
So, why do surety companies sell their bonds in annual terms if the bond is “continuous”? A lifetime bond is too risky for the surety company (if the bond is needed for multiple decades) and too costly for you (if the bond turns out to be needed for only a year).
The surety company needs to underwrite the bond at regular intervals to account for fluctuations in risk from you or within your industry. Part of the underwriting is a soft credit check. Reassessing the bond risk may give you an opportunity for a better rate or different payment options that would better suit you. Conversely, should your personal credit decrease, there may be a higher renewal cost.
Jet’s Process - Better Than the Rest
Our monthly paying customers do not concern themselves with renewing their bond. As long as the card on file with Jet goes through, the bond stays active.
You may have purchased your bond upfront in a one-, two-, or three-year term. Jet sends a renewal invoice months in advance via email and mail. All that’s needed to proceed is payment, which can be done in the following ways:
A link is sent to your email to purchase online. Call (855) 296-2663 to pay for a bond renewal over the phone. Lastly, if you received an invoice in the mail, it can be sent back in the prepaid envelope you receive with a check.
Whether monthly or annually, Jet will notify you of legislative and/or underwriting changes. For monthly customers these notifications will occur every one to three years; annual customers are notified at renewal.
Let’s use the example of a Contractor License Bond to see how a bond would be renewed with Jet.
Contractor Bob has a $20,000 Contractor License Bond that is due for renewal on December 31st. In October, Jet will send renewal invoices via mail and email. Contractor Bob likes to save time, so he clicks the link in his email to pay for his renewal. But, he notices that his price is different from his previous rate of $250 for one year. Contractor Bob hasn’t only been building homes, he’s been building up his credit. With his improved credit score, Jet approved Bob at a lower rate and his new bond rate is $150 a year.
Contractor Bob selects a monthly term online and submits payment information. Confirmation and receipt are available immediately for Contractor Bob and he is all set!