When an individual gets arrested and qualifies to pay bail, they have a couple of options to get the money. They may choose to settle the entire amount of the bail themselves, stay in jail until the case is resolved at trial, or employ a bail bondsman agent to post it on their behalf.
So how do bail bondsmen make money, and what guarantee do they have that they will get their money back?
Read on as we take a look at how bail bonds work and how agents make their money.
How Do Bail Bonds Work?
Bail bonds or surety bonds work as a type of guarantee agreement that a defendant will show up for trial if they are released from jail. It’s an agreement between the defendant and a bail bondsman that may be co-signed by an indemnitor. A bail bondsman gets paid by charging the defendant a fee for posting the bail bond.
The paperwork for the bail bonds can be completed electronically, so the process is pretty fast. Before signing the contract, the bail agent will need a statement of creditworthiness from the defendant on any collateral (property or securities) they may have. Once the bail agent signs the contract and submits the bail bond to the jail, the defendant will be released.
Depending on the contract, the defendant will be required to follow certain conditions, like regularly checking in with the bail agent or following a curfew. Failure to meet any of the provisions of the contract leaves the agent free to revoke the bail.
Additionally, if the defendant does not show up at court on the date and time appointed, the indemnitor or bail bondsman will have to pay the full amount of the bond. It’s why many bail bond companies resort to bounty hunters to track the defendant down and return them to jail.
And while bail bonds work pretty simply, it’s an overall risky business. But given that the industry currently employs 20,813 people in the US and has been growing at an average annual rate of 3.5%, it’s one that’s obviously lucrative too. Let’s see how strong a business it is and dig into the ways bondsmen make money.
How Do Bail Bondsmen Make Money?
Bail bondsmen make money by charging a premium fee on top of the bail bonds. The premium can range from 10% to 20% of the amount of bail to cover the full amount assigned by the court. For instance, if bail is set at $20,000, bail bond companies that charge 10% would charge $2,000 as a down payment before they submit the bail.
Across the US, each state has different regulations for bail bonds. In Utah, for example, the fee is up to 20% of the amount posted by the court, in California, it’s 10%, while some states like North Dacota require it to be greater than $75 or up to 10%. And some states like Wisconsin, Illinois, Kentucky, and Oregon have a ban on commercial bail bonding.
How Much Does a Bail Bondsman Make?
The average annual salary of a bail bondsman in the US is $43,402. Depending on the state, experience, education, certifications, and years spent on the job, a bail bondsman may earn between $39,489 and $48,483 a year.
It’s an industry that has a lot to do with experience and evaluating risk factors which is why new bail bond agents may earn as little as $25,000 while more experienced ones may earn double or more, as some reports mention a bail bondsman gets paid up to $50,000 or even $150,000 a year.
Bail Bonds Business Income
Bail bond companies generate a total of $1.9 billion in revenue, according to the latest data. And given that the median bail for a felony arrest in the US is approximately $10,000, and a bail bondsman gets paid between 10% to 15% of the amount, the average revenue from these services is around $1,000.
But there are also more serious crimes that incur higher amounts or up to $1 million, for which the premium is usually lower at 1%, but it’s still a sizeable amount. A bail bond worth $1 million would earn a bondsman a sum as high as $10,000, making it a highly lucrative business to get into.