FAQ'S (ADAI)

1. When must I obtain a bond?

Answer:

The law went into effect July 1, 2009. You must be able to show evidence of the bond before the state will renew or issue a dealer license.

2. Which licenses require a bond?

Answer:

Automobile Auctioneer, Converter Manufacturer

Dealer Distributor

Distributor Branch Distributor Representative

Factory Branch Factory Representative Dealer

Wholesale Dealer Automotive Mobility Dealer

Manufacturer Transfer Dealer

Exception: Transfer Dealers, Wholesale Dealers and Automobile Mobility Dealers if licensed prior to July 1, 2009 (see Senate Enrolled Act No 117)

3. What or how do I show evidence of a bond?

Answer:

An original bond must be furnished to the Indiana Secretary of State Dealer Division, Indiana Government Center-South

302 West Washington Street, Room E-018

Indianapolis, IN 46204.  Once they have an original bond, renewals may be in the form of another original bond or Certificates of Continuation (of which they will accept fax copies sent to (317) 233 1915.

4. From what companies can I purchase the required Bond?

Answer:

Surety and in particular Dealer Bonds, is a specialized market within the insurance industry. Vernon General and a relatively few other insurance companies indulge in Surety Bonds and especially Dealer Bonds.

5. Why should I buy the bond from Vernon General?

Answer:

First of all Vernon is your Association’s own Company whose purpose is to better serve its members. The bond it has created for its members is intended to simplify the application process and keep the cost down. In addition to the Vernon bond being competitively priced, it is discounted an additional 20% for its members.

6. What is the cost of the Bond and how much is the bond for?

Answer:

The bond is for $25,000 as required by the regulation (in the aggregate for all claims). The annual premium is $220 (plus a $12.50 processing/handling fee), however it is discounted 20% to ADAI members thus making the final cost $176.00 plus a $12.50 processing/handling fee. $188.50 Total.   ADAI members save even more by paying up to three years in advance;

2-year premium is $344.00 (plus 12.50) Total $356.50 (Average annual total cost is $178.25

3-year premium is $504.00 (plus 12.50) Total $516.50 (Average annual total cost is $172.17.

An additional benefit for purchasing multiple years is that a new bond or Certificate of Continuation is automatically sent to the Dealership about 30 to 45 days prior to each prepaid renewal date.

7. Does the bond cover all my dealerships?

Answer:

No. A bond is required for each license.

8. Just what does the bond cover?

Answer:

The bond covers judgments that a court may issue against a dealer for violations of Sections IC9-23-2-2 (a) (4) (e) & (f). In essence it does not replace the responsibility of the dealer to satisfy the judgment but if the dealer does not satisfy the judgment, the bond will pay the State for the amount of the judgment (up to the limits of the bond). Then it will be the responsibility of the dealer to reimburse the Bond company for the amount of the payment plus costs.

9. What if I elect to cancel my Vernon bond in favor of buying a bond from another company?

Answer:

There is no refund of premium in the event of cancellation. However, you would have to immediately show to the State, evidence of the new bond in order to prevent remedial action by the Secretary of State for failure to maintain the required bond.

10. How do I go about applying for a bond?

Answer:

Apply online directly to www.unitedsuretyagents.com or to your Association website (www.adai-inc.org) where there should be a link to the application process.  You can also contact Vernon General's Bond Administrator directly at (317) 254 8721 or (800) 467 2245 or Fax (317) 254 1234

11. To whom should the payment be made?

Answer:

The payment should be made payable to United Surety Agents, Inc (the administrator) and sent to your Association at 150 West Market Street, Suite 812, Indianapolis, IN 46204. Or send direct to United Surety Agents, Inc, 5153 N. Shadeland Ave., Indianapolis, In 46226.

12. For what term is the bond?

Answer:

The bond is issued for an annual term and renewable 12 months later.  Once there is an original Vernon General Bond, Vernon can also issue Certificates of Continuation for partial years to correct situations where the bond renewal date does not match the Dealer License renewal date.

13. Under what circumstances could the bond be cancelled or not renewed?

Answer:

The most common reason for cancellation or non-renewal would be failure to pay the renewal premium, failure to indemnify the Surety Company after they pay a claim in your behalf or upon termination or suspension of your dealer license or termination of your ADAI

membership.

14.  What other services are offered by Vernon General relative to the Dealer Bonds? 

Answer:  Vernon, through its Administrator United Surety Agents, can furnish Change of Name forms and Changes of Address forms that must be furnished to the Secretary of State Dealer Division.

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