Auto insurance settlements are compensation funds paid to a policyholder after claiming financial support from the insurer. When filing an auto insurance claim you may ask your attorney questions like ” is my settlement taxable?” or ” does settlement money get taxed?”
As per the tax code, a personal injury settlement is tax-free when the settlement is used to compensate for physical sickness or physical injury. Therefore you’ll not be required to include your injury settlement or auto insurance settlement when declaring your income.
However, some elements of the settlement will be taxable including emotional distress damages, lost wages, and punitive damages.
Before purchasing a car it is important to understand the status of the title and personal injury settlements.
A vehicle has a certificate of title that contains crucial legal information like who owns it. Most people get a certificate of title after buying a vehicle and transferring it to their name.
However, what will happen if the process fails to go as planned? If a vehicle’s title is missing the titleholder will be compelled by the state to get a bonded title.
A bonded title or a certificate of title surety bond is not difficult to obtain when you are aware of the fundamentals of how the title works. What is a vehicle title? What is a title bond? What is a surety bond? Who requires a bonded file? Read on to get answers to these crucial questions.
What Is A Vehicle Title?
A vehicle title is a certificate that contains key information about a vehicle and it is usually issued by the government and can help during personal injury settlements.
This key information includes who owns it, the vehicle model, vehicle identification number (VIN), and whether it has been wrecked or damaged.
This title is used to register the vehicle with the department of motor vehicles (DMV), sell the vehicle, and purchase insurance. All vehicles need a vehicle title however the title can be damaged, stolen or it could get lost.
There are also rare cases of a car being sold without the proper documentation and because of these, a certificate of title bond will be required.
What Is A Title Bond?
A title bond is a document that confirms who owns a car. This title can be used in place of a traditional car title to register a car with the department of motor Vehicles (DMV), to insure or sell a vehicle, and it can also help with personal injury settlements.
Bond titles are available for various vehicles including buses, motorcycles, automobiles, and motorhomes.
Why Does A Vehicle Have A Bonded Title?
When a vehicle is lost or damaged it makes it hard to verify whether the owner of the car owns it legally. Therefore the owner will be required to obtain a bonded title which includes purchasing a surety bond.
A surety bond is a three-party agreement that has a neutral party that guarantees an obligation or a contract. A principal purchases a bond and pays a premium to the neutral party known as a surety.
When the principal misrepresents any details of the ownership of a vehicle the DMV or injured party can file a case against the bonded title. When a claim is filed against the principal their surety company will expect them to take care of the claim.
What Can A Title Bond Be Used For?
Title bonds cost $100 for bonds that cover $6000 or less. These charges will increase if the bond surpasses $6000. A title bond can be used for various things including:
- For legal purposes to determine who lawfully owns a vehicle.
- To protect oneself from cases of selling a vehicle illegally.
- Allows the owner to purchase insurance or register the vehicle with the department of motor vehicles (DMV).
How To Quickly Attain A Bonded Title?
A bonded title can be acquired online or using a phone. When your payment is complete you’ll receive your title bonds.
To make the process as smooth as possible ensure you have your driving license name, address, year, manufacturer and model of your vehicle, vehicle identification number, and know the worth of your vehicle.
When Is A Bonded Title Required?
A titleholder may need to purchase a bond title when:
- You buy a vehicle and the vendor did not provide a title
- You purchase a vehicle that doesn’t have the current owner’s name on the vehicle title
- You misplace your vehicle title
- You purchase a custom vehicle that doesn’t have a title
A bond title will eventually function as a regular title after three to five years depending on your state. Selling a vehicle using a bonded title is possible however the potential buyer should be aware of it.
Procedure Of Acquiring A Title Bond
Make an effort to locate the original title by contacting the prior owner or state officials. Use certified mail, for record-keeping in case your state needs this information.
Contact your state department of motor vehicles for instructions on how to determine the bond amount for your title bonds. The bond amount is usually based on the estimated value of a car. You may also need to submit additional supporting documents to your department of motor vehicles.
Note that a bond title can be challenged for a certain period (3years) after it has been issued.
If You Have Legal Issues With Your Bonded Title Hire An Attorney
A bonded title will help in determining the owner of a car during a court case. Just hire a good attorney if you’re unable to understand your state’s laws concerning your title bond. In case of disagreements with the bond, the title trusts your attorney to provide adequate legal advice.
About Georgia State Auto Insurance
If you are looking for reliable insurance consultants, then look no further than Georgia State Auto Insurance Inc. Our experts will help you with your auto insurance settlements and personal injury settlements.
Our experienced staff will help in identifying whether the settlement you receive will need to be taxed. Call us today for an auto insurance quotation!