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Bail is part of how the criminal justice system operates in the United States. Bail bond companies are essential to this, helping people pay bail when they may be unable to do so from their own pockets. When someone is arrested and charged with a crime, a bail amount may be set, which the defendant can pay to secure their release from jail. Bail bonds allow them to pay 10% of the total bail amount, or sometimes less, with the bail bond company paying the rest.
But how exactly do bail bond companies make money? It might seem as if there is no benefit to them, at first glance. Maybe you're wondering what's in it for the bail bond companies, when it looks like they just pay the majority of the bail amount. Of course, there are both risks and rewards for bail bond companies when they provide bail bonds. They are able to charge a fee for providing their services, but they also become partly responsible for making sure the defendant appears at all of their required court dates.
What Does a Bail Bond Agent Do?
Bail bond agents work with people who have been charged with a crime, as well as their loved ones, to help secure their release from jail. They do this by paying the majority of the bail amount while asking the defendant (or someone representing them) to pay up to 10%. The bail bond agent provides financial help when someone is unable to pay the full bail amount on their own by providing a surety bond. The surety bond is a contract between the defendant, the bail bond company, and the court. If the defendant fails to attend court, the bail bond company will forfeit the full bail amount to the court.
To provide their services, bail bond agents charge a non-refundable fee to their clients. This is usually a proportion of the total amount of the client's bail, which is often 10% but could be less, depending on various discounts that might be applied (for example, for military members).
The bail bond agent will help to ensure bail is posted as quickly as possible. Once this has been processed, the defendant can be released from jail while waiting for their court date. The bail bond company might also take steps to make sure their client will appear in court. This is to help protect the company's investment and prevent it from losing the full bail amount.
This might include regularly checking in with the client to check where they are and make sure they will arrive on their court date. Sometimes the defendant or a co-signer will provide a form of collateral, which helps to protect the bail bond company's investment. If the defendant fails to turn up in court, a bail bond agent may attempt to track them down so that they can be brought back into custody. They can choose to work with bail enforcers (or "bounty hunters") to help with this.
How Do Bail Bond Companies Make Money?
Bail bond companies make money by charging a non-refundable fee to their clients. Regardless of what happens with the defendant's legal case, the bail bond company retains the fee paid for the services it provides. Although 10% of the bail is the standard (and maximum) amount that bail bond companies usually charge, the payment could be less in some circumstances. Many bail bond companies offer discounts or can provide payment plans to help spread the cost.
For example, if the bail is set at $5,000, the defendant would pay $500 dollars if they are asked to pay a 10% fee.
This fee (also called a premium) is the main way bail bond companies make money. Because of this, it's non-refundable. However, it helps defendants and their families avoid the need to come up with the total bail amount.
How Much Do Bail Bond Companies Make?
You might also be curious about how much bail bond companies can make using this model. One thing that's important to note is that, although they charge their clients a fee, bail bond companies also have to have the capital available to pay their clients' bail. They take a risk by agreeing to pay the bail, which they might not get back if the client fails to fulfill their obligations and show up at their court dates.
It's difficult to determine how much any individual bail bond company might make. It depends on a range of factors, including how many clients they have, what type of clients they work with, and how much their premium is. Bail bond agencies also have various costs, including licensing and operating costs.
How to Make Money in Bail Bonds
Not just anyone can set themselves up as a bail bond agent. There are certain licensing requirements that need to be met and fees that a bail bond agent or agency will need to pay. For example, bail bond agents in California need to be licensed with the California Department of Insurance. This requires them to complete training and pass an examination, as well as pay a licensing fee that must be renewed every two years. A bail bond agency must also pay a licensing fee for a license that has to be renewed every two years.
Bail bond agents are required to continue their education and stay up to date with the law and best practices. They will also have other costs for running their business, including renting office space, administration costs, and, of course, paying bail for their clients.
How to Get a Good Deal on a Bail Bond
If you're worried about being able to afford a bail bond, you might be able to find an agency that works for you. Many bail bond agencies like King Stahlman Bail Bonds provide payment options and discounts to make things easier. Our options include 20% off for military, union members, lifetime residents, and AARP members.
Contact us today to find out more about how we can help you afford bail.