10/26/2010

How to get Professional Indemnity Insurance / Cash or Surety Bond - for Real Estate Brokers and Appraisers

SEC. 26 of the R.A. 9846 is a provision that requires real estate brokers and private real estate appraisers to get Professional Indemnity Insurance/Cash or Surety Bond.

"All real estate brokers and private real estate appraisers shall, in addition to the oath referred to in the preceding section, be required to post a professional indemnity insurance/cash or surety bond, in an amount to be determined by the Board, which in no case shall be less than Twenty Thousand Pesos (P20,000.00), without prejudice to the additional requirement of the client. It will be renewable every three (3) years. "

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Understanding the Purpose of Bond

A real estate broker or appraiser is engaged by a client by virtue of trust and confidence. Brokers and appraisers must serve their primary clients 100% loyalty and always protect their interest. When the broker or appraiser breaks the value of loyalty, the client may suffer financial losses. In case the client lost some amount of money because of the violation of the broker or appraiser with their code of ethics, the client may file a complaint with the Philippine Professional Regulation Commission and claim compensation for the damages. The PRC may use the Professional Bond to pay the damages. If the amount of the damage being claimed is more than the bond posted by the broker or appraiser, then the client will have to collect the exceeding amount directly from the broker or appraiser.

A Professional Bond is like a performance bond of the broker or appraiser. The law requires a minimum of P20,000 bond. Big-time brokers may post a bigger bond to increase the trust and confidence of their clients.

A Surety Bond is a security/guarantee instrument issued by an insurance underwriter that is accredited with the Philippine Insurance Commission. The amount of the bond is backed up with CASH or ASSETS with at least an equivalent value of the bond. The professional may show proof that he OWNS a car or house with a value greater than P20,000 if he wants to post a bond of P20,000.


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How to get a Professional Indemnity Insurance/Cash or Surety Bond


[Based on my experience]

1. Scan your ID/Certificate as a Real Estate Broker or Appraiser
2. Scan your CEDULA
3. Scan your Car Registration or Property Title
4. Scan your Passport

5. Contact the Insurance Agent. Write an email to the insurance agent and attached those scanned files. Here is a sample of the email. The Insurance Agent I can recommend is Evangeline "Emma" D. Mendoza. Her email is joya_branch@cocolife.com, Mobile:(+63 ) 917 5301995, Voice: (+63 2) 400-0563.

6. Pay the Bond Fee by depositing CASH to the bank account that Emma will tell you. The amount is PhP 1,550 including the cost of sending the policy to you by LBC. Take note, this is a very convenient no-appearance process, so I would strongly encourage you to be kind enough to pay a little more extra for the errand who will do the legwork (in my case, I sent a total of P2,000).

7. You will receive two sets of stapled Bond Certificates from from Travellers Insurance Surety Corporation. Don't forget to sign on your name at the bottom part of the Certificate. The PRC will get the white set with a receipt. You will keep the pink set for your personal file.


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Sample of Email to the Insurance Agent

[I changed some information are changed for privacy reason]

TO: Evangeline D. Mendoza
Email: joya_branch@cocolife.com
Mobile:(+63 ) 917 5301995
Voice: (+63 2) 400-0563

Dear Mrs Mendoza:

I would like to apply for a Surety Bond.

Amount: P20,000
In favor of: Professional Regulation Commission
Purpose: Requirement for Real Estate Broker License


Applicant Name: JOHN ODONNELL Remollo PETALCORIN (PASSPORT Attached File)

ADDRESS: 88 Marcos Highway Antipoli City

Community Tax Cert #: 12345673 Issued at Antipolo City on 01/11/2010 (CEDULA Attached File)

Civil Status: Married

Name of Spouse: Esther C. Petalcorin

Business: Petalcorin Realty

Business Address: 88 Marcos Highway Antipolo City

Business Tel#: 632-4234567

Kind of Business: Real Estate Broker (LICENSE Attached File)

How Long is the Business Registered: 1 Yr

Type of Business: Sole Proprietorship

Guarantee Asset: Motor Vehicle, Plate# TRL-345, Toyota Corolla GLI, 1994, Engine# 4A-K712345, Chassis# AE191-5674536, color White, Value: Market Value: P150,000. (Certificate of Registration attached File)

Truly yours,

JOHN REMOLLO PETALCORIN

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2 comments:

Jon said...

sir, thanks for this post. as i am a new board passer for real estate brokerage, i was wondering WHEN the bond is needed. will the PRC ask for it when i register for the certification and oath-taking, or anytime after? i hope you can clarify for me as registration is april 7-14, and i'm running out of time :D thanks!

Darlene G. Frost said...

Glad to read such a great blog that has covered up each and every component of professional indemnity insurance.