Overview of Kentucky Highway Use Bond Requirements
Individuals or businesses who transport passengers, property and other goods, and would like to use Kentucky’s public highways, are sometimes required to post a highway use bond. Currently, the requirement pertains to vehicles whose gross weight exceeds 60,000 lbs.
A type of surety bond, highway use bonds ensure that motor carriers pay all taxes, interest and fees that they owe to the state as prescribed in the Kentucky Revised Statutes (Sections 138.655 to 138.725). Failure to abide by these provisions can lead to a bond claim, which will serve to compensate the state of Kentucky for any losses incurred.
To learn how much getting a highway use bond will cost you, plus all the details about these bonds, continue reading the sections below.
If you still have questions, you can always call us at (866)-450-3412. Our agents will be happy to help!
Kentucky Highway Use Bond Cost
The total amount of these bonds is calculated as four times your monthly tax liability or $1,000– whichever number is greater. This amount is the bond’s penal sum, meaning your maximum liability as per the bond agreement.
However, you are not required to pay that full amount unless there is a valid claim. The price you pay, also known as the bond premium, is just a few percentage points of the total amount. If your bond is $1,000, you will pay a flat rate of $100. However, if your bond amount is larger, your bond cost is a bit more complex to calculate.
A bonding company will evaluate your credit report, your credit score and your financials before they give you your premium. Typically, applicants pay between 1% and 3% if they have a good credit score. You can learn more on our surety bond cost guide.
Information for Applicants with Bad Credit
Applicants with a FICO score of 650 or less, those with no credit history, or those with past due items in their reports will usually be subject to higher premiums, but rarely exceeding 10%.
Bonding companies demand higher premiums from those applicants in order to offset their own risk associated with underwriting the bond. However, often, your premium costs can go down if you can demonstrate strong financial or industry experience. Our agents will work closely with you to make sure you get the lowest possible premium by building a strong application.
If you want to learn more about the underwriting process with bad credit, check out our page on bad credit surety bonds.
Applying for Your Kentucky Highway Use Bond
Getting bonded has never been easier and faster thanks to our secure online application. All you need is five minutes to submit the application and we’ll take it from there. We’ll contact you with your free bond quote and further instructions on finalizing your application.
The underwriting process can vary based on your unique circumstances, but in most cases, you can get your bond within two business days.
Understanding bond claims
In Kentucky, these highway use bonds act as protection to the state in case you transgress applicable laws and regulations. The most frequent offense is failure to declare and pay taxes owed to the state.
Other violations include operating without a license for activities where a license is required, or submitting false statements regarding your business.
If you’re notified of a violation, you must make good on the claim by paying it back. However, if you fail to do it, the surety must do it for you. Since the ultimate responsibility lies with you, however, the surety will still sue for reimbursement.