What is a Texas Utility Bond?
Know why you need to get your utilities bonded!
Utilities, such as electricity, gas, water, and garbage disposal, undoubtedly play a vital role in our lives. The utility companies that provide these services are required to continuously supply us with reliable, fast, and efficient service. To do that, we as a consumer should pay the necessary charges that we owe these companies on time.
What is a Utility Bond and what does it do?
Since missed payments still happen, utility companies in Texas require those whom they will provide service for to produce a utility bond before the needed service is given. The bond will serve as a guarantee that the utility bills will be appropriately paid.
Through the utility bond, the principal, along with the surety, is ensuring the utility company (obligee) that the bills will be paid in full and at the proper time that it should. In the event of a missed payment, the utility company has the right to file a maximum bond payment claim.
If the principal abides by the main condition – meeting his monthly payment obligations to a utility company – the bond will remain ineffective.
Bond Validity and Conditions
The bond condition may slightly vary per utility company. Some utility providers will retain the bond and its full effect for an indefinite period from the date the bond is issued. Others will require a renewal certificate of the utility bond after two or three years.
If the bond is terminated, some companies will demand to be given a 30-day notice, while others require a 60-day notice.
How much is the bond amount?
Just like the validity and the conditions, the amount of the bond will vary. This will depend on the rules and regulations of a utility company and the type of service provided.
Is this bond for me?
A utility bond is mostly a requirement for businesses. However, utility companies might request for the bond from homeowners as well, especially if the person has a history of unpaid monthly bills.
How can I get this type of bond?
You can contact us to get your credentials checked by going through the prequalification process. That’s the first step in getting a utility bond. One of the expert underwriters will collect the necessary information from you. Once qualified, we will then proceed with the process of securing a bond.
Importance of paying utility bills on time
Aside from the continuous flow of utility service, paying your bills on time will have a great impact on your credit standing. With a good credit score, you will pay less when acquiring a bond and will have a bigger chance of being immediately qualified for one.
However, having an unfavorable credit score doesn’t necessarily mean that you won’t get bonded. You will still get bonded, regardless.
It’s easier than you think! Call us now so that we can start the process!