In the state of North Carolina, many utility providers require business account customers to provide a deposit in order to activate electrical or gas service. Utility companies seek protection from financial damages caused by new customers and Jet Insurance Company provides the utility deposit bond as a guarantee for commercial customers in lieu of a cash deposit.
When you buy your bond with Jet, the application takes minutes through our streamlined process. Jet cuts out the middlemen who slow down the process and can cost you more in the form of fees and commissions.
At Jet, your utility deposit bond can cost as low as $100 for a year. Annual cost is calculated as a percentage of the total bond limit, which is a multiple of typical monthly charges, depending on the utility provider’s requirements.
Jet operates as a direct carrier, so we work with you throughout the process from application, release of bonding requirement, discontinuation of service, and any claims that arise in between.
Yes, Jet can! Once you purchase your bond, Jet will immediately ship the bond (original or electronic copy, depending on the Utility Provider’s requirements) to your Utility Provider for you. An electronic copy of the bond will immediately be emailed to you for your records as well.
Other carriers charge you shipping fees to send you the bond, and then leave shipment to the provider up to you at your expense. Not at Jet!
If you would like the original bond mailed directly to your location, you can select that option at checkout. Please note the bond must be filed with the applicable Utility Provider at the address in the table below:
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The deposit amount (consequently the bonding limit) varies based on the utility provider. The table below details how each individual utility determines the deposit amount they require, if that information is available. Some utility companies prefer to conduct a soft credit check for a custom deposit amount for all new customers (also noted in the table).
Utility Deposit bonds are generally considered continuous until the discontinuation of service. In some cases (see table of utility companies), the bonding requirement is eliminated, and the bond amount refunded after a period of successful on-time payments.
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In general, Utility Deposit bonds cannot be cancelled until service is discontinued and the account balance is paid in full. In some cases, utility providers reduce the bonding requirement once the customer has successfully paid their bill on time for a period of time (typically after 12 to 24 months of on-time payments).
When you decide to discontinue your service with your utility provider, ensure you have paid any outstanding balance with your provider, who will in turn release Jet’s liability for your account. Most utility companies do not release liability to the customer or surety until 30, 60 or 90 days after cancellation of service; during this time, any charges that accrue to the account must still be paid to avoid a bond claim. Please refer to the chart above to see each utility’s cancellation period.
With Jet you can! Other insurance carriers and brokers retain the unearned premium and charge fees for early cancellation. Ever heard of a minimum earned amount? We have from our competitors rate filings and consider it a hidden tactic to account for inefficiencies. Jet returns all premium not earned to our customers.
Jet will request cancellation through the NMLS and the bond does remain active for 30 days following cancellation notice. We do have to factor in any time the bond is active into our return calculations.
To avoid a bond claim against your deposit (and surety bond), simply pay your utility bill on time and close out your account balance when you discontinue service. If a business defaults on an outstanding balance, the utility provider may file a claim against the surety bond.
In a few cases, utility providers may reward sustained payment history and reduce or eliminate the deposit requirements after a defined period of on-time payments. See table above under Bonding Reduction Requirements.
If you receive a claim against your bond, Jet will investigate the claim from the utility company to assess the claim’s validity. You will need to provide Jet with any evidence of payments made and if payments are all current.
If the claim is found to be valid, Jet will pay the claim up to the bonding amount. However, you are responsible as the account holder for missed payments, and are still obligated to pay Jet back for the amount of the claim.
In addition, many utility companies stipulate that the surety bond will be used to compensate for any legal fees incurred in processing the claim. Again, you are still responsible to reimburse Jet for such charges, should they arise.
The Utility Deposit Bond exists as an alternative to submitting a full cash deposit that protects utility companies from financial damage that might be experienced when businesses default on their utility payments. This could occur if a customer allows their account balance to go unpaid for a period defined by the provider (commonly 30, 60, or 90 days), or if a customer discontinues service and leaves behind an outstanding balance.
If you forgo the deposit, which does free up capital for other necessary business expenditures, then the Utility Deposit Bond from Jet is a great option to meet the needs of the utility. We give them the financial guarantee they need to allow your business to get services started.
Applying for your bond with Jet is easy. Depending on the size of your required deposit, your application can be completed in minutes and completely online. For larger deposits, Jet will ask you for some additional financial information about your business, conduct a short review, and quickly send you a quote for your bond. Bonds are purchased online, and a copy of the bond and receipt will be immediately available for your records.