A person who can't afford bail goes to a bail bondsman for help. Since the bondsman is providing the bail money, he needs to underwrite the transaction to address the risk of putting up the cash himself. Underwriting, the process a financial service company uses to evaluate candidates for products, is necessary to prevent the bondsman from incurring losses from a bad transaction.
A person who is arrested must post bail money if she doesn't want to sit in jail until her court date. The amount is set by the court and depends on the type of crime and the perceived risk of the accused fleeing. More serious crimes such as assault have higher flight risks and result in larger bail amounts. The accused pays a percentage of the bail amount -- such as 10 percent -- to the bondsman, who covers the rest. When the accused shows up for her court date, the bail money is returned to the bondsman, who keeps the fee.
The bail bond underwriter's primary job is to access the overall risk of putting up the accused's bail. The underwriter examines different areas of the accused's financial and personal life, including her financial situation and family circumstances. He will review her credit report, income, housing status and job history to estimate financial stability. Her prior record, including other convictions, and family situation is researched to help estimate flight risk. A person with children, for example, may be less likely to flee.
The underwriter may approve the accused on her own credit history and other factors, or he may require one or more indemnitors, people who essentially cosign for the accused. Any person may act as an indemintor, although it's often the accused's family and friends. An indemnitor is taking on some or all the responsibility for the bond. For example, an indemnitor may agree to pay the bondsman in full if necessary. If the accused skips court, the indemnitor is on the hook for the bail money the bondsman lost. The underwriter evaluates the financial history and background of proposed indemintors before approving the bond.
A bail bond underwriter may require security for the bond in the form of collateral, or property the bond company can take and sell if the accused skips court. Collateral includes cars, real estate and other forms of property. The indemnitor must have enough equity in the collateral to cover the bond amount. For instance, if the bond is for $100,000, the indemnitor's house alone isn't enough if it's only worth $60,000. The underwriter will require more collateral before issuing the bond.
While many aspects of the bond underwriter's job include scrutinizing figures, such as the accused's current income and property, he also uses his personal judgment. For example, if the underwriter feels the accused or his indemnitors are being dishonest, he may not approve the bond because he doesn't feel he can trust the accused to show up for court.