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810-5-75-.34 Title Obtained Under Surety Bond
(1)
If the department is not satisfied as to the ownership of the vehicle or
manufactured home, or that there are no undisclosed security interests in the vehicle or
manufactured home, the applicant(s) must complete an Electronic Surety Bond Request
Form (form MVT 10-1A) for an Alabama certificate of title under surety bond. Upon
approval of the request for a surety bond, the applicant(s) will be provided a Certificate
of Title Surety Bond (form MVT 10-1) for a motor vehicle or manufactured home, to be
completed by the applicant(s) and the insurance company issuing the surety bond.
(2)
The standardized amount of the surety bonds are as follows:
(a)
Trailers:
1.
Less than five (5) model years old - $25,000
2.
Five (5) model years old but less than ten (10) model years old - $10,000
3.
Ten (10) or more model years old - $5,000
(b)
Passenger vehicles and pickup trucks:
1.
Less than five (5) model years old - $50,000
2.
Five (5) model years old but less than ten (10) model years old - $25,000
3.
Ten (10) or more model years old - $10,000
(c)
Trucks, buses and recreational vehicles:
1.
Less than five (5) model years old - $100,000
2.
Five (5) model years old but less than ten (10) model years old - $50,000
3.
Ten (10) or more model years old - $25,000
(d)
Motorcycles:
1.
Less than five (5) model years old - $25,000
2.
Five (5) model years old but less than ten (10) model years old - $10,000
3.
Ten (10) or more model years old - $5,000
(e)
Manufactured homes:
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1.
Less than (10) model years old - $50,000
2.
Ten (10) or more model years old - $25,000
The manufactured home identification number for each section will be printed on
the form MVT 10-1. The same certificate of title surety bond number issued by the surety
company shall be listed, in the appropriate space, on each form MVT 10-1.
(3)
Upon completion of form MVT 10-1, the applicant(s) must complete
form MVT 5-1E Application for Certificate of Title through a designated agent. The
application must be made within ninety (90) days from the date the surety bond was
executed.
(4)
The following documents are required to accompany the application for
certificate of title:
(a)
Form MVT 10-1 must be properly completed by applicant(s) and an
insurance company licensed to issue surety bonds in the state.
(b)
The certificate of title surety bond must be signed by a representative of
the surety company and include a power of attorney for each representative
authorized to sign on behalf of the surety company.
(c)
Documents by which applicant(s) claim(s) ownership of the motor vehicle
or manufactured home (i.e. bill of sale, registration, etc.).
(5)
The certificate of title, when issued, will be printed with the legend "THIS
TITLE WAS SECURED UNDER THREE-YEAR SURETY BOND".
(6)
When an application for certificate of title is supported by a certificate of
title issued under surety bond that is currently in effect in another jurisdiction, the
applicant(s) will be required to post a surety bond in Alabama in order to title the motor
vehicle or manufactured home.
(7)
Once the form MVT 10-1 has been printed, it may not be modified or
altered (i.e. strikethroughs, whiteout, etc.).
(8)
The surety bond will indemnify any prior owner and lienholder and any
subsequent purchaser of the vehicle or person acquiring any security interest in it, and
their respective successors in interest, against any expense, loss, or damage, including
reasonable attorney's fees, by reason of the issuance of the certificate of title of the
vehicle or on account of any defect in or undisclosed security interest upon the right, title
and interest of the applicant in and to the vehicle for a period of three (3) years from the
date the bond is executed.
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(9)
When the owner(s) of a vehicle deemed “salvage”, applies for a certificate
of title under surety bond, the bond amount must be:
(a) 25% of the bond amount provided in subsection (2) for vehicles less than
ten (10) model years old.
(b) 20% of the bond amount provided in subsection (2) for vehicles ten (10) or
more model years old.
Author: James Starling and Mike Gamble
Authority: §§ 40-2A-7(a)(5),32-8-1 through 32-8-88, and 32-20-24, Code of Ala.
1975.
History: Amended: Filed November 23, 1998, effective December 28, 1998.
Amended: Filed March 28, 2012, effective May 2, 2012.
Amended: Filed October 30, 2014, effective December 4, 2014.
Amended: Filed June 20, 2020, effective September 14, 2020.
Amended: Filed March 22, 2021, effective May 5, 2021.
