A Down Payment Bigger Than You Planned
You expected twelve equal payments and were asked for a large amount up front. See the total, the down payment and the schedule on one page, and ask about early cancellation before you bind.
What to Ask About Your Payments
You expected twelve equal payments. Then the quote asked for a large amount up front. Or a seasonal policy arrived with a payment schedule you did not plan for.
- The total.
- Ask for the total premium and any down payment on one page. Your quote shows the down payment, if one applies, before you bind, which means before the insurer agrees in writing to cover you.
- The schedule.
- Ask how many payments there are and when each one is due.
- The early exit.
- Ask whether any part of the premium is not returned when a policy ends early. Your quote states it.
Before You Agree to a Payment Plan
- A premium finance agreement.
- It is an agreement to repay a premium finance company the amount it advances for your premium, plus a service charge, in installments.
- The lender.
- The lender is a premium finance company. The state facts below show how one state licenses it.
- Payment terms.
- Ask for yours in writing before you bind.
- If a policy is cancelled.
- Cancellation notices and refunds are explained on Billing, Cancellation and Reinstatement.
State Facts
In Connecticut, premium finance agreements
- An insurance premium finance agreement is an agreement in which the insured promises to pay the premium finance company the amount advanced for premium, together with a service charge.
- The company is a licensee of the Insurance Commissioner.
- The agreement must show the total premium, the down payment, the principal balance, the service charge, the balance payable and the number of installments.
- A Connecticut premium finance agreement must state the amount of the down payment.
In Connecticut, a missed payment
- If the agreement gives the finance company the power to cancel, the company must first mail at least ten days’ written notice of its intent. The cancellation does not go forward if the default is cured in that time.
- When a premium finance company cancels, the insurer returns the unearned premium to the finance company, which credits the insured’s account and refunds any surplus.
Frequently Asked Questions
Why is the quote asking for a large amount up front?
Your quote shows the down payment, if one applies. Ask for it on the same page as the total premium and the payment schedule.
What is a premium finance agreement?
It is an agreement to repay a premium finance company the amount it advances for your premium, plus a service charge, in installments. The state facts above list what one state requires the agreement to show.
What happens if I cancel before the policy ends?
Your quote states if any part of the premium is not returned when a policy ends early. For notices and refunds after a cancellation, see Billing, Cancellation and Reinstatement.
What happens if I miss a payment?
Call the finance company named on your bill, and call us. What happens next depends on your agreement and your state’s law. The state facts above show the steps one state requires before a finance company can ask the insurer to cancel. See Billing, Cancellation and Reinstatement.
Can I see my payment terms before I agree?
Ask for them in writing before you bind.
Can you tell me what it will cost me to finance?
We cannot give a rate, a fee or an amount on this page. Ask for the figures in writing before you bind.
Ask Before You Bind.
Request a quote, and your payment options are shown before you decide.