Condominium Coop and HOA Learn Insurance Premium

I am positive that loads of condo/coop & HOA board members have the following question: how come on my Automobile & HO-6 Coverage policies I pay the premiums directly to the insurance policy carrier, and I have the option of monthly installments, whereas on the condo/coop or HOA master ?auto insurance 77070 insurance policy I have to pay the premiums to my agent or broker, and the premium has to be paid in full upon binding of the policy and if I can't afford to pay it in full then we have to get quality financing? That's a very good question, and it all comes down to 2 main ways that insurance plan premiums are being charged:

Direct Bill
Agency Bill

Direct Bill

Most personal lines insurance coverage policies, including personal automobile insurance, homeowners insurance, renter's insurance policy and personal umbrella insurance are direct bill. This means that the insurance policies carrier is billing the policy holder directly. Most personal lines insurance policy policies come with the option of quarterly or monthly installments, you'll have to pay a down payment (usually 20%) upon binding, and the rest will be split up to quarterly or monthly installments. In most cases you'll be charged a small fee for every installment anywhere from $1 to $6 depending if you set up automatic withdrawals from your bank account. Once the policy is in effect, the agent or broker has nothing to do with the billing of your insurance policy (of course he'll get a notice of cancellation if you don't pay your high quality and call you up to make certain that you'll make a payment so your policy shouldn't cancel). This is why on all your personal insurance policies policies you pay the coverage company directly and you have the options of installments.

Agency Bill

But when it comes to your condo/coop or HOA's master coverage policy it's a whole different story. Most condo/coop or HOA policies are agency billed, this means that the insurance policies carrier is billing the insurance policy broker the full policy top quality, and the broker has to bill the condo/coop or HOA association. The broker usually has 30 to 90 days to pay the full premium to the coverage carrier. This is the reason why you pay the insurance plan premiums to the insurance policy agent or broker and why it has to be paid in full. But what if your condo/coop or HOA association can't afford to pay the whole premium at once?

High quality Financing

Most condo/coop or HOA associations don't have extra money lying around, so when your policy top quality is more than $20,000 it's kind of hard to pay the full amount up front, that's when quality financing comes in to play. Your insurance broker should help you out with the quality financing; there are plenty of good financing companies out there. The interest rates are usually between 6 & 10%. They will only finance about 80% of the high quality, which means that you'll have to pay about 20% upon closing. How does the whole financing process work? The financing company sends a check of the full top quality (minus your 20% down payment) to the insurance policy broker. Then the insurance policy broker sends to the insurance plan company the down payment that he got from the condo/coop or HOA and the check that he got from the financing company (minus his commissions). Then the financing company is going to bill you monthly or quarterly with a 6 to 10% interest rate. The following is something that unfortunately happens quite often: The insured made guaranteed to have the policy paid up in full, whether by paying the full amount or by getting high quality financing, and after a few weeks they get a notice of cancellation in the mail. What happened here? Very simple, your broker received the full amount, now he has up to 60 days to pay the company, and very often brokers neglect or on purposely delay paying the insurance policy company right away. This is wrong and illegal and you should stay away from such insurance coverage brokers.